Artificial Intelligence: Its Applications and Impact on the Saudi Financial

Artificial intelligence is a branch of computer science aimed at enabling systems to simulate human capabilities in learning, analysis, and decision-making. AI technologies have evolved to include machine learning, deep learning, and natural language processing, allowing systems to analyze vast amounts of data and extract patterns and predictions. In the financial market, AI serves as an essential tool for analyzing financial data, automating processes, and providing accurate insights into trends and changes.

With the rapid pace of digital transformation, AI has become an integral part of banking operations, investment firms, and financial markets, where it is used to enhance information security, analyze markets in real-time, and develop intelligent customer services. This transformation is a key driver of digital economic growth in Saudi Arabia and the world.

The Saudi financial market (Tadawul) is undergoing a radical transformation thanks to the adoption of AI across various sectors. Its applications include market forecasting, portfolio management, trading automation, and risk analysis. AI also contributes to improving digital banking services, developing e-commerce solutions, and supporting cybersecurity initiatives.

These trends align with Vision 2030, where Saudi Arabia has placed AI at the forefront of its strategic priorities, launching national initiatives such as the Saudi Data and Artificial Intelligence Authority (SDAIA) to develop infrastructure and stimulate technological innovation. This momentum has led to a significant increase in the number of companies relying on smart analytics and big data in their operations.

According to international reports, the AI market is experiencing annual growth exceeding 20% globally, with expectations that corporate spending on AI systems will surpass $300 billion by 2026. In Saudi Arabia, statistics indicate that government and investment spending on AI and advanced technologies will reach billions of riyals in the coming years.

The percentage of digital service users in the Kingdom has increased by more than 30% by 2025, and government initiatives in this field have doubled, confirming the radical transformation of the financial sector towards AI as a fundamental element of economic growth and competitiveness.

In the Saudi stock market, AI has become a key tool for analyzing big data, monitoring stock movements, and providing advanced analyses of market trends. Brokerage firms and investment institutions utilize AI technologies to manage portfolios and automate buying and selling processes based on advanced algorithms.

This has improved the speed and accuracy of operations, reduced operational costs, and minimized risks associated with market volatility. AI has also aided in developing fraud detection systems, analyzing investor behavior, and providing decision-support tools based on accurate data, while adhering to the regulatory standards of the Saudi Capital Market Authority.

Elm Company is one of the most prominent Saudi companies listed in the tech services sector on Tadawul, distinguished by its leadership role in developing AI solutions and applications in the local market. The company offers advanced electronic services, including cybersecurity solutions, data processing, and the development of AI applications for both government and private sectors.

Elm has recorded strong financial performance in recent years, with its share price reaching 891.50 riyals in March 2025 and a market value of 74.4 billion riyals. It has also achieved growth in revenues and profits, along with an increase in cash distributions to shareholders. This performance reflects the growing demand for AI solutions and confirms the company's position as a key driver of digital transformation in Saudi Arabia.

Financial data for Elm indicates significant growth in revenues and profits, supported by the expansion of smart services and the adoption of AI in its projects. In the first half of 2025, the company's revenues reached approximately 800 million riyals, an increase of over 35% compared to the same period in 2024, while net profit was around 130 million riyals, up nearly 30%.

The company's price-to-earnings ratio stands at about 85, with an annual cash distribution yield ranging between 3-4%. These indicators reflect investor confidence in sustainable growth and market expectations for a larger role of AI in enhancing the efficiency and profitability of tech companies.

The tech services sector in the Saudi financial market includes a wide range of companies offering software solutions, big data, data centers, and IT services. The sector is characterized by high growth rates exceeding the average market performance, driven by increased investments in digital technology and advanced infrastructure.

Among the main challenges facing the sector are the need for specialized human resources in AI, data protection, and compliance with strict privacy policies. Innovation also requires significant investments in research and development, necessitating effective financial management and long-term planning to ensure a return on investment.

Competition in the Saudi AI sector is marked by a diversity of local and international players. Among the prominent local companies are Aramco Technology Solutions, the Saudi Computer Company, and STC Solutions. These companies are developing advanced solutions in cybersecurity, big data, and intelligent systems for government and private institutions.

Global companies such as IBM, Microsoft, and Oracle also compete by offering cloud services and advanced AI platforms in the Saudi market. This diversity enhances innovation and drives local companies to invest in research and development, creating a strong competitive environment that supports the achievement of Vision 2030 goals.

In recent years, Saudi Arabia has launched several notable initiatives to enhance the position of AI locally. Among the most important is the establishment of a Scientific Advisory Council for AI under the Saudi Data and Artificial Intelligence Authority (SDAIA), aimed at guiding national strategies and developing the safe and effective use of smart technologies.

The Public Investment Fund has also announced significant investments in tech companies and established partnerships with global institutions in robotics and AI. The government continues to support innovation by creating national research centers, funding startups, and hosting international conferences and forums specialized in AI.

Vision 2030 serves as the main framework for the Kingdom's transformation into a knowledge-based digital economy, with AI being one of its core pillars. The Saudi government aims to enhance the contribution of the tech and AI sector to GDP and expand the use of smart solutions in health, education, energy, and manufacturing industries.

Through substantial investments in digital infrastructure and the development of national competencies, the Kingdom expects to achieve qualitative leaps in the quality of public and private services, increase the effectiveness of financial systems, and support the competitiveness of the Saudi financial market at both regional and international levels.

Despite the significant momentum in adopting AI, the sector faces challenges related to developing qualified human resources, data protection, and ensuring compliance with ethical and regulatory standards. On the other hand, these challenges present opportunities to enhance investment in technical education, establish specialized training programs, and develop legal frameworks for AI governance.

Technological transformations also provide significant opportunities for startups and established institutions to innovate and offer new solutions in areas such as health, transportation, and financial services. Government investments and partnerships with global research institutions are among the driving factors for the sector's growth and sustainability.

The Saudi Capital Market Authority places great importance on the governance of tech companies and regulating investment activities in AI. The authority imposes strict transparency and disclosure requirements and monitors companies' compliance with ethical standards and investor rights protection.

Additionally, efforts are underway to develop new legal frameworks for AI governance in collaboration with government entities and research institutes. These frameworks focus on ensuring data privacy, mitigating technical risks, and enhancing social responsibility in AI applications. This regulatory approach is a key element in building investor and end-user trust.

The AI sector in Saudi Arabia is expected to witness accelerated growth in the coming years, with the introduction of new technologies and the expansion of applications across various sectors. The contribution of AI to GDP is anticipated to increase, revealing innovative investment opportunities in financial services, health, energy, and education.

The Kingdom aims to enhance the innovation environment by supporting research and development, facilitating access to financing for companies, and developing strong international partnerships. As digital transformation continues, AI will remain one of the most important drivers of competitiveness and sustainability in the Saudi financial market.