Saudi Arabia’s ICT Hits US$10 Billion: Trends and Implications

Saudi Arabia’s ICT spending surged to over US$10 billion in 2024, driving digital transformation across health, defense, infrastructure, and education. For foreign investors, the Kingdom offers a stable, well-funded, and opportunity-rich environment aligned with Vision 2030 goals.

Saudi Arabia’s public sector digital transformation took a major leap forward in 2024, with government information and communications technology (ICT) contracts surging to SAR 38 billion (US$10.13 billion)—an 18.75 percent increase over the previous year. This significant rise in spending reflects the Kingdom’s ongoing commitment to embedding digital infrastructure and services at the core of its Vision 2030 reform agenda.

According to the Digital Government Authority’s annual Government Spending Report, the health and social development, military, and infrastructure sectors emerged as the primary recipients of ICT allocations, accounting for a substantial share of the year’s 4,756 signed contracts. The focus of government investments shifted decisively toward artificial intelligence, cloud computing, and emerging technologies, signaling a strategic pivot from digitization as a support function to digitization as a driver of governance efficiency and economic resilience.

Equally notable is the growing maturity of Saudi Arabia’s public procurement mechanisms. The expansion of national framework agreements not only accelerated service delivery but also generated an estimated SAR 1 billion (US$266.63 in savings through improved budgeting and negotiation practices. Against this backdrop, Saudi Arabia’s ascent to sixth place globally in the 2024 UN E-Government Development Index and its leadership in regional digital governance underline the international recognition of its progress.

As the Kingdom continues to deploy digital solutions across core public service sectors, understanding the sectoral composition, financial tools, and strategic priorities of ICT spending in 2024 offers insight into the next phase of Saudi Arabia’s digital transformation journey.

Sectoral breakdown of ICT contract spending

Saudi Arabia’s ICT procurement in 2024 was marked by a broad-based distribution across several strategic sectors, with health, defense, and infrastructure leading in both value and contract volume. The data underscores how digital transformation is no longer confined to isolated government functions but has become embedded across a wide spectrum of public services.

Health and social development

The health and social development sector accounted for the largest share of ICT spending, receiving SAR 6.54 billion (US$1.74 billion) through 1,085 contracts. This investment reflects the state’s prioritization of digital health infrastructure, telemedicine, and health data integration as key enablers of service quality and accessibility.

ICT deployments in this sector are aligned with broader public health reforms under Vision 2030, aiming to reduce systemic inefficiencies and enable more proactive, tech-driven care delivery. Artificial intelligence (AI) is increasingly used in diagnostics and hospital management, while cloud-based platforms facilitate patient data coordination across institutions. These investments are not only modernizing care provision but also enabling real-time responses to health crises and population health needs.

Beyond immediate medical services, the inclusion of “social development” in this budget line points to the integration of ICT in welfare programs, social protection systems, and citizen engagement platforms. These tools are expected to enhance outreach, improve benefit distribution, and reduce bureaucratic delays.

Military and defense

The military sector followed closely behind health in ICT contract value, with SAR 5.16 billion (US$1.37 billion) allocated across 1,125 contracts in 2024. This reflects a sustained push to integrate advanced technologies into defense operations, procurement, and logistics — a trend that aligns with Saudi Arabia’s broader ambition to localize military production and develop indigenous defense capabilities.

The nature of ICT investments in the military is increasingly characterized by emerging technologies, including AI-driven surveillance systems, secure communication platforms, and digital command-and-control infrastructure. These investments are part of a longer-term strategy to enhance situational awareness, interoperability, and decision-making efficiency within the Kingdom’s armed forces.

Importantly, the scale and frequency of defense-related ICT contracts suggest a shift from isolated system upgrades to a more comprehensive digital transformation across defense institutions. Cybersecurity, in particular, has become a key concern, with substantial investments aimed at hardening systems against evolving threats in an increasingly volatile regional security environment.

This digital modernization also supports domestic industry development. As part of Vision 2030’s localization targets, the government is likely channeling part of this spending through partnerships with local ICT firms, defense contractors, and Saudi-owned technology startups — contributing to job creation and knowledge transfer in the high-tech sector.

Infrastructure and transport

The infrastructure and transport sector accounted for SAR 5.26 billion (US$1.40 billion) in ICT investments in 2024, reinforcing its role as a cornerstone of Saudi Arabia’s digital economy. As the Kingdom accelerates efforts to modernize logistics, enhance connectivity, and build smart cities, digital infrastructure is becoming central to long-term planning.

Government contracts in this domain reflect growing interest in intelligent transport systems, digital asset management, and real-time data platforms that improve the efficiency and safety of mobility networks. Investments are likely being directed toward technologies such as traffic flow analytics, autonomous vehicle infrastructure, and IoT-based monitoring tools for roads, railways, and ports.

These upgrades are particularly critical for logistics and supply chain optimization. Saudi Arabia’s aspirations to become a regional logistics hub under the National Transport and Logistics Strategy require seamless integration between digital platforms and physical infrastructure. ICT solutions are thus being used to enhance customs operations, streamline freight management, and reduce bottlenecks at ports and border crossings.

Moreover, the rise of smart city projects such as NEOM and The Line necessitates foundational digital systems to support urban automation, environmental monitoring, and integrated service delivery. In this context, ICT spending in the infrastructure and transport sector is not just about modernization — it is a precondition for the success of Saudi Arabia’s broader urban and economic vision.

Other key sectors

While health, defense, and infrastructure drew the largest ICT allocations, several other sectors also recorded significant spending, reflecting the comprehensive nature of Saudi Arabia’s digital transformation. These include:

• Education: The education sector continued to receive strong support, with SAR 4.37 billion (US$1.16 billion) invested in digital learning platforms, cloud-based school systems, and AI-powered tools for personalized education. Following the pandemic-era pivot to remote learning, the government has maintained momentum by institutionalizing e-learning frameworks and investing in teacher training, student access, and content development.
• Economic resources: ICT investment in the economic resources sector — which includes energy, mining, and natural resource governance — reached SAR 3.42 billion (US$911.86 million). Funds are being used to digitize exploration data, automate resource monitoring, and optimize energy infrastructure.
• Public administration: The government also allocated SAR 2.39 billion (US$637.24 million) toward the digitalization of public administration, focusing on process automation, digital identity management, and citizen service platforms. These systems enhance transparency, reduce paperwork, and improve the responsiveness of public institutions.

2025 Outlook and investment opportunities

With over US$10 billion in government ICT contracts awarded in 2024, Saudi Arabia is emerging as one of the most dynamic and well-funded digital transformation markets globally. For foreign investors and technology partners, this signals not only the strength of Riyadh’s digital ambition, but also the depth of opportunity across sectors where the public and private spheres increasingly converge.

Managing scale, delivering value
As the digital public sector grows more complex, Saudi authorities face the critical challenge of sustaining operational efficiency while scaling up investments. The maturing procurement ecosystem — including the expanded use of national framework agreements — provides a solid foundation for disciplined spending.

But moving forward, the emphasis will shift toward value creation, lifecycle performance, and system integration. For international firms, this creates a demand for high-quality, interoperable solutions and specialized advisory capabilities that go beyond short-term implementation.

Capacity building and cybersecurity
The rapid pace of adoption in AI, cloud computing, and data analytics will require significant upskilling across the public workforce. This opens doors for foreign companies offering digital training services, cybersecurity solutions, and capacity development programs tailored to the needs of government clients.

At the same time, cybersecurity investment is poised to become a defining feature of the next wave of ICT contracts. With the expansion of digital health records, smart infrastructure, and AI-enabled defense systems, the demand for resilient digital architecture — including threat intelligence, encryption, and endpoint security — will rise substantially.

Strategic role of public-private partnerships
The 2024 figures make it clear: Saudi Arabia is not merely investing in technology — it is cultivating a digital economy. For global ICT players, system integrators, and digital service providers, the opportunity lies in forging long-term partnerships that align with Vision 2030’s institutional transformation goals.

Investors will find a growing number of tenders, co-development projects, and joint ventures, especially in sectors prioritized for localization and innovation. The government’s strong policy orientation and predictable procurement frameworks reduce entry barriers and create an increasingly level playing field for foreign entrants.

Future sectors of growth
Looking ahead, the most compelling opportunities will emerge in the very sectors that led spending in 2024. Defense-related ICT will increasingly center on AI, advanced surveillance, and secure networks. The healthcare sector is scaling digital diagnostics, telemedicine platforms, and health data systems at a national level. Education continues its pivot toward adaptive learning, and infrastructure projects — from NEOM to regional transport hubs — are embedding smart systems at their core.

Saudi Arabia is not just catching up — it is setting a new regional benchmark for government-led digital transformation. For investors seeking stable returns, large-scale contracts, and long-term alignment with a national vision, the Kingdom offers one of the most structured and strategic ICT investment environments in the Middle East.

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