Tighter foreign investment is pushing Riyadh to draw foreign AI firms into its real estate sector through new state-backed platforms and funding initiatives
News Desk - The Cradle
In recent months, Riyadh has openly positioned AI at the center of its development strategy, as was underscored by Crown Prince Mohammed bin Salman’s (MbS) visit to Washington, where AI partnerships and semiconductor agreements were central to the discussions alongside other geopolitical topics such as the conditions for normalization with Israel.
The renewed emphasis reflects pressure from tightening foreign direct investment, which has slowed progress on projects such as Neom and Diriyah, prompting Saudi policymakers to adopt AI as a faster, more cost-efficient vehicle for economic transformation.
This pivot was visible at last month’s Future Investment Initiative (FII) gathering in Riyadh, where Humain, a Public Investment Fund–owned AI company, drew more attention than the gigaprojects themselves.
Saudi officials and developers used the event to outline new ventures that merge AI with real estate development – two foundational pillars of Vision 2030 – with the aim of building infrastructure that is more sustainable, data-driven, and aligned with long-term demographic and investment goals.
Among the major announcements at FII was a $100-million partnership between Saudi developer Arabian Dyar and Google, focused on integrating AI and big-data analytics into property development and market intelligence.
Parallel to this was the rise of NeoCity, a consortium-backed initiative launched in September by investor Aya Zaghnin alongside Saudi firms Aqar and Retal, and funded by the National Technology Development Program (NTDP) – a state agency.
NeoCity, described by managing director Zaghnin as “an innovation platform,” links developers, contractors, engineering firms, and other real estate actors seeking to capitalize on the kingdom’s AI expansion.
It supports startups from pre-seed stages to Series B funding and offers a proof-of-concept lab, allowing companies to test products inside Saudi Arabia before committing major resources.
At the Cityscape forum in Riyadh, NeoCity unveiled a $100-million venture fund backed by government agencies, major real estate firms, and institutional investors.
According to Zaghnin, the fund is designed to attract foreign AI firms into the Saudi market by linking them to developers, financiers, and regulators, with fundraising expected to close in April 2026.
Its first cohort – 10 startups from India, Singapore, the UK, the US, and other countries – has already secured $9.8 million and begun piloting AI tools in construction, property management, and sustainability.
More than 1,000 applications were submitted, showing some international interest in Saudi-linked real estate technology.
The kingdom is also deploying AI across state-backed gigaprojects, including Neom, where urban planning, logistics, energy management, and building operations depend heavily on AI.
But NeoCity is positioned differently, focusing on small and medium-sized private developers rather than government megaprojects.
As Saudi Arabia prepares for a new 2026 law allowing foreigners to own property in designated areas, developers are working to make projects more “foreigner-friendly.”
International brokerage firms have begun expanding into the kingdom, while local firms strengthen their global presence.
Zaghnin aims to replicate NeoCity’s model regionally, with plans to enter the UAE next year and Qatar thereafter. She notes that the UAE market is “much more mature” and saturated with corporate venture capital funds, underscoring the competitive landscape Saudi Arabia is seeking to navigate as it redefines its development strategy through AI-driven investment.
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