Saudi King Salman (R) and his son Crown Prince Mohammed bin Salman (MBS) have drawn some of the biggest names on Wall Street and tech to Riyadh for the kingdom’s annual finance summit.
AFP via Getty Images
As Israel continued to bombard Gaza just two weeks after a devastating incursion of Hamas militants, it was business as usual at a summit dubbed “Davos in the desert,” Saudi Arabia’s annual investment showcase. In attendance were a gallery of billionaires, Wall Street titans and tech hotshots like disgraced Uber founder Travis Kalanick and ousted WeWork CEO Adam Neumann, all of them drawn to the kingdom’s pot of gold — the $778 billion sovereign wealth fund.
Organizers of the Future Investment Initiative summit claim that only a handful of delegates canceled attending. The Saudi event has weathered worse in its short history — Western leaders, corporations and executives abandoned plans to attend in 2018 following the murder of Washington Post columnist Jamal Khashoggi. The CIA later determined that the killing had been at the direction of Saudi Crown Prince Mohammed bin Salman, who appeared at the summit briefly.
Outside of headline speakers like JP Morgan’s Jamie Dimon, Goldman Sachs’ David Solomon, and former White House envoy Jared Kushner, few delegates at the gathering in the Saudi capital Riyadh were keen to be named. As headlines from the war flashed overhead on screens, business leaders offered platitudes: “There is a new S in ESG which is security,” warned Citi’s Jane Frazer at the event, swapping out the social in “Environmental, Social and Governance” investing. A few blocks away, outside the headquarters of the country’s Human Rights Commission, the word “Rights” blinked intermittently on the building’s massive illuminated sign.
Animated doves flashed overhead on electronic billboards as silver-clad dancers took to the stage to kick off the event, which was followed by a snippet of Puccini from a schoolboy opera singer. Later, a trio of robots would hold Q&As sessions and a poetry recital. And on Wednesday, Jared Kushner, who secured a $2 billion investment from Crown Prince Mohammed bin Salman just six months after leaving the Trump administration’s White House, would opine on the Gaza war. “When the forces of good are winning, the forces of evil will try to stop them — and that’s what I really believe the terrorist attack was meant to do,” he said. “Israel’s economy was rocking in terms of all the different growth, it was a very attractive partner to a lot of people in the region and the progress between Saudi and Israel was progressing incredibly well.”
The war was a recurring talking point for the pundits in attendance. But the real business at the conference, which drew 6,000 business leaders, investors, and minor celebrities like Dr. Oz, were updates on Saudi Arabia’s massive experiment in breaking its economy’s reliance on oil.
Suitors crowded around staff from the sovereign wealth fund and its technology investment arm, Sanabil, but the booth manned by the agency promoting foreign investment into Saudi Arabia, and partially state-owned Aramco, which has largely funded the bonanza, was notably quieter.
The summit marked the halfway point in Mohammed bin Salman’s 14-year plan to remake the Kingdom’s economy by 2030. So-called “giga” projects like a $500 billion effort to build a futuristic city called Neom on the Red Sea are tentpoles of the plan that has also seen the kingdom become a major investor in golf, soccer, video gaming and tech companies.
SoftBank’s founder and CEO Masayoshi Son was one notable absence from the event. However, many of SoftBank’s investing missteps like Uber’s Travis Kalanick and WeWork’s Adam Neumann were on parade.
Saudi Arabia’s $3.5 billion investment into Uber in 2016 marked the start of a growing, and occasionally fraught relationship with Silicon Valley. Months after that deal, Saudi Arabia’s sovereign wealth fund invested $45 billion into SoftBank’s Vision Fund and its founders quest to bring a global scale not only to startups like Uber and WeWork, but also to tech investing itself. The Vision Fund recorded an annual loss of $32 billion last year, according to Reuters.
WeWork cofounder Neumann, who oversaw the coworking startup’s chaotic rush to a $47 billion valuation in 2019 before being ousted by his board just months later over a string of scandals touted his brand of “impact entrepreneurship” during a Shark Tank-style pitch competition.
One contest winner, who shouted “I love Adam Neumann” to a round of applause, was awarded a mentorship with the man himself, a three-month stay at a property managed by his new startup Flow, which Neumann describes as “the Four Seasons” of condos. Another prize was the opportunity to pitch to Andreessen Horowitz, which shoveled $350 million into Flow last year as Neumann’s former business, which raised nearly $17 billion from investors, teeters on the edge of bankruptcy.
“We have been observing the changes and they have been unbelievable to see in business, in finance, in human rights, in every single category,” Neumann proclaimed.” It is beautiful to see when business and government can be aligned…we all have a choice: we are either creators, or destroyers, and I choose to be a creator and I think this country chooses to be a creator.”
Saudi Arabia under the de facto rule of MBS has carved out a dramatically new path for itself. PIF’s investment in golf, football, and listed tech stocks like Lucid and Activision Blizzard, have grabbed headlines around the world. Meanwhile, its venture arm, Sanabil, has been quietly backing a growing list of big-name venture capital funds — Andreessen Horowitz, Sequoia China, Tiger Global.
Inside Saudi Arabia, these investments have reverberated across the country. Riyadh is slated to host the latest edition of a once unthinkable dance music festival and now a bougie coffee shop overlooks Deera Square, formerly the site of public executions and known locally as Chop Chop Square.
Speaking at the event, PIF governor Yasir Al-Rumayyan claimed the Vision 2030 investments has inspired a flood of new investments in the kingdom, along with some 560,000 jobs. Meanwhile women’s participation in the workforce has exploded to 33% by 2020 from 19.7% in 2018, according to the Brookings Institution. Entrepreneurship non-profit Endeavor estimates that there’s now a higher ratio of women working at Saudi startups than in Europe and roughly the same level as the United States.
The pace of spending that has enabled these changes has been challenging even for the vast resources of the Public Investment Fund. The fund recorded an annual loss of $15.6 billion last year but its assets grew after another tranche of Aramco stock was transferred under its control, Bloomberg reported in August.
