Think of Saudi Arabia and the first thing that comes to mind might be its massive, oil-derived wealth.

While oil continues to drive Saudi Arabia’s economy, the kingdom is now expanding into areas such as artificial intelligence, tourism and sports to diversify its growth avenues.

According to Saudi Arabia’s Minister for Investment Khalid Al falih, more than half – 50.6% – of the Saudi economy is now “completely decoupled” from oil.

“This percentage is growing,” Al Falih told CNBC’s Dan Murphy, adding that government revenue used to be almost completely derived from oil money, but now, 40% of its revenue comes from sectors and sources that “have nothing to do with oil.”

“We’re seeing great results, but we’re not satisfied. We want to do more. We want to accelerate the kingdom’s diversification and growth story,” he said.

Saudi Arabia is doubling down on fast-growing sectors such as artificial intelligence, naming it one of its new growth areas, with Al Falih saying the kingdom will be a “key investor” in developing AI applications and large language models. saudi Arabia would also build data centers “at a scale and at a competitive cost not achieved anywhere else.”

“AI has emerged [in] the last three, four years, and it’s definitely going to define how the future economy of every nation. Those who invest will lead, and those who lag behind, unfortunatly, will lose,” he pointed out.

On Monday, AI chip company Groq’s CEO, Jonathan Ross, told CNBC that Saudi Arabia is becoming a hub for AI infrastructure thanks to its energy surplus. The country could see more than $135 billion in gains by 2030 thanks to AI,according to PwC.

Saudi Arabia’s quarterly budget performance report revealed that total government revenue for the first half of 2025 came in at 565.21 billion Saudi riyals ($150.73 billion),with oil making up 53.4% of the country’s overall revenue, down from 67.97% in the same period in 2019.

In 2024, the country reported a record $3.08 trillion in GDP.

Saudi Arabia Holds firm on Spending Despite Falling Oil Prices

Saudi Arabia isn’t reducing its budgets or cutting public spending, even as oil prices decline, according to Minister of Investment Khalid Al Falih. this comes as oil prices have decreased in 2025, with Brent crude spot prices down 13.4% so far this year, as reported by FactSet.

Saudi Arabia’s oil revenue decreased by 24% in the first half of 2025 compared to the same period last year.

When directly asked if falling oil prices were creating financial pressure on the country’s economy and government revenue, Al Falih stated that there were no plans to scale back budgets or reduce public spending.