IBM CEO to Asharq Al-Awsat: Saudi Arabia Enters AI Implementation Phase

IBM: Saudi Arabia should use digital technologies to boost productivity and make them part of the workforce, not just an added technology layer.
IBM: Saudi Arabia should use digital technologies to boost productivity and make them part of the workforce, not just an added technology layer.
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IBM CEO to Asharq Al-Awsat: Saudi Arabia Enters AI Implementation Phase

IBM: Saudi Arabia should use digital technologies to boost productivity and make them part of the workforce, not just an added technology layer.
IBM: Saudi Arabia should use digital technologies to boost productivity and make them part of the workforce, not just an added technology layer.

At IBM Think 2026 in Boston, IBM’s bet on Saudi Arabia went beyond expanding its role in AI infrastructure. The US technology company sought to position itself as a partner in a tougher phase, turning that investment into large-scale industrial and institutional execution.

That message came through in remarks by IBM Chief Executive Arvind Krishna to Asharq Al-Awsat. Speaking about the kingdom and the challenge it now faces, Krishna said infrastructure is not the problem in itself, adding that what needs to be done on that front is already largely clear.

It is now closer to a matter of spending and execution than a strategic dilemma.

But Krishna quickly shifted to what he sees as the more important question: how these technologies can improve citizens’ lives and help new industries emerge faster.

Krishna linked Saudi Arabia’s AI path to broader economic and operational needs. He said the kingdom, given its population size and development ambitions, needs digital tools that raise operational capacity and productivity. Digital technologies and AI, he said, should become “part of the workforce” and help lift productivity over the long term.

Beyond infrastructure

To make his point, Krishna did not use a purely technical example. He turned instead to a Saudi case tied to Hajj, tourism, and related services.

He said that if Saudi Arabia wants to receive tens of millions of visitors, it cannot simply bring in millions more workers to run hospitality, logistics, and services.

Digitalization and AI must become part of the solution, he said, allowing those sectors to scale within five years rather than twenty.

The discussion, in other words, moved beyond energy and major government projects. It extended into services, the daily economy, and how they can grow faster. Krishna said he sees little disagreement over the kingdom’s vision.

The challenge now, he added, is the cultural and operational adoption of technology across industries.

A new operating model

That Saudi reading fit the broader message Krishna pressed throughout the conference.

In his keynote, he presented AI not as a tool to improve certain functions or speed up tasks, but as the start of a new “operating model” for institutions.

The question, he said, is no longer about budget size or computing investment. It is about how deeply AI is embedded in business operations, and whether it becomes part of the institution itself or remains on the margins.

Krishna supported that argument with figures meant to show that the debate has moved beyond promises. He spoke of the potential to achieve productivity gains of around 40% by 2030.

He said more than two-thirds of organizations plan to reinvest those gains in innovation and growth, rather than treating them only as cost cuts.

He also said IBM itself has achieved $4.5 billion in annual productivity gains from using AI and automation inside its own operations.

With that message, IBM seemed to tell the market that AI is no longer just a technology upgrade or a new tool. It is becoming a business model issue.

Redesigning the enterprise

In an “Ask Me Anything” session, Krishna compared many current AI uses to the “light bulb” phase of the electricity era. They are useful and convenient, he said, but they do not fundamentally change how a company operates.

Speaking to Asharq Al-Awsat, he said real transformation begins when AI is used to rebuild processes from end to end, across procurement, human resources, accounts payable, compliance, and other functions.

Only then does the real impact appear, and productivity in some areas can rise sharply.

IBM is no longer framing AI as an assistant for some employees. It is presenting it as an operating layer that must move into the heart of the institution.

The Saudi market moves to scale

IBM’s view of the Saudi market follows the same logic.

In a separate interview with Asharq Al-Awsat, Ayman AlRashed, IBM’s regional vice president in Saudi Arabia, said companies in the kingdom are moving from “isolated experiments” to “deployment at scale.” AI, he said, is no longer a side addition, but “a core part of how companies operate and compete.”

AlRashed said computing power is no longer the main bottleneck. The bigger challenges are now “AI-ready data, governance, and enterprise execution.”

He said the sectors closest to moving AI from pilots to large-scale production are banking and financial services, telecommunications, energy, and government. Progress in those sectors, he said, depends on data maturity, clear regulatory frameworks, and operational scale.

AlRashed added that the sovereignty debate in Saudi Arabia is no longer limited to where data is stored. It now includes how workloads are governed while running, especially as AI moves into more sensitive and regulated environments.

Saudi clients, he said, are asking sharper questions about return on investment, ranging from cost savings and higher productivity to lower risk and measurable outcomes, rather than merely focusing on launching new pilots.

In that sense, IBM’s local reading echoed Krishna’s message on stage in Boston. The Saudi market lacks neither ambition nor infrastructure. It is entering a phase in which AI will be measured by its ability to deliver real operational impact within institutions.

Sovereignty as operating power

Other parts of IBM’s message made its Saudi positioning more coherent.

This year, the company presented hybrid infrastructure, digital sovereignty, live data, automation, and governance as connected elements, not separate products.

Krishna repeatedly said countries and institutions need infrastructure they can control, systems that cannot be shut down, tampered with, or exposed to geopolitical risk, including disruptions to undersea cables.

In Saudi Arabia, that message carries added weight. Sovereignty over infrastructure is not an end in itself. It is part of the ability to run AI across strategic sectors with flexibility and stability over the long term.

Aramco takes the stage

Saudi Aramco’s Senior Vice President for Digital and Information Technology, Sami Al-Ajmi, appeared on the opening stage at IBM Think 2026 as the practical example IBM wanted to highlight.

IBM did not put Aramco in the spotlight simply to present it as a major client or longtime partner. It used Aramco as proof that the move from pilots to industrial execution is no longer theoretical.

Krishna recalled that the relationship between the two companies dates back to 1947, when IBM helped install Aramco’s first information processing system, the first of its kind in Saudi Arabia. But the conference was not focused only on that history. It was focused on what the relationship looks like today.

Al-Ajmi said the relationship is no longer one between a vendor and a buyer. It has become “a strategic alliance around joint innovation.” He said IBM’s opening in Saudi Arabia brought the company closer to Aramco and helped “localize some expertise.”

He summed up the shift in a phrase that captured IBM’s message: “Eighty years ago we were buying machines from IBM, today we are working together to build the future of digital technologies.”

In that sense, IBM is no longer presenting itself only as a technology seller. It is presenting itself as a partner that wants to help build the kingdom’s next industrial AI use cases.

From pilots to the field

The strongest part of Al-Ajmi’s remarks was his definition of what Aramco wants from AI.

He said the company is “not interested in proofs of concept or early experiments.” It wants to “move ideas from the lab into the field.”

That statement placed Aramco at the center of IBM’s message this year. The next phase, IBM argues, will not be won by the number of experiments a company launches. It will be won by the ability to build a real and operational AI model.

Al-Ajmi said the two sides can “close the loop from idea to impact” by identifying real problems, designing solutions, testing them, and scaling them when they work.

His figures gave weight to that argument. Aramco generates nearly 10 billion data points a day from its assets, he said, describing data as “the fuel of the AI journey.”

He also said Aramco has trained more than 6,000 AI specialists, speeding up idea generation and deployment and bringing the technology closer to field operations.

Al-Ajmi said digital technology initiatives created $5.2 billion in value last year, with “more than 50%” of that coming from AI deployments.

With those numbers, Aramco was not talking about AI’s theoretical promise. It was talking about direct financial and operational impact.

AI and energy

Al-Ajmi added another important dimension. AI, he said, is changing the energy sector in two ways at once. It raises efficiency and reliability while lowering costs, but it also increases energy demand.

He pointed to practical applications within Aramco, including petrophysical models that address rock formations and fluids, enhancing reserve value, reducing drilling time, and lowering costs. He also cited global optimization tools that provide a full view of assets and help improve refinery and petrochemical margins, an “engineering adviser” that supports engineers in the field, and AI applications in finance and supply chains.

AI at Aramco, in other words, is no longer a limited office tool or a digital assistant. It is spreading across the value chain.

IBM’s Saudi bet

In Boston, IBM was not making a conventional technology pitch to Saudi Arabia. It was offering a full narrative.

Infrastructure matters, but the real challenge begins after it is built. The vision exists, but adoption and execution will decide the outcome. AI will not prove its value in the kingdom through demonstrations, but by entering energy, tourism, services, government, and finance as part of how those sectors operate.

IBM’s message from Boston was not that Saudi Arabia simply needs more computing power. It is that the kingdom is entering a phase in which AI will be judged by its ability to change how institutions and industries operate on the ground.



Egypt Signs Deal to Transfer Shares in Wataniya 172 Fuel Stations to Taqa Arabia

Egyptian Prime Minister Mostafa Madbouly. Reuters file photo
Egyptian Prime Minister Mostafa Madbouly. Reuters file photo
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Egypt Signs Deal to Transfer Shares in Wataniya 172 Fuel Stations to Taqa Arabia

Egyptian Prime Minister Mostafa Madbouly. Reuters file photo
Egyptian Prime Minister Mostafa Madbouly. Reuters file photo

Egypt signed an agreement on Thursday with Taqa Arabia to transfer ownership of a stake in 172 state-owned Wataniya fuel stations through a newly established company, Quick Fuel, according to a ⁠cabinet statement.

Under the ⁠agreement, Taqa Arabia will acquire a 10% stake in Quick Fuel and will also have ⁠the option to acquire an additional 15% stake when the company is listed on the Egyptian stock exchange, Reuters reported.

Egypt said last year it would offer stakes in military-owned companies, which included Wataniya Petroleum, through ⁠its ⁠sovereign wealth fund.

The IMF has made increasing the role of the private sector in the economy a requirement for Egypt's $8 billion loan program.


Hormuz Shock Hits Gulf Economies, Saudi Arabia Takes Center Stage in 2026

 In this picture obtained from Iran's ISNA news agency on June 8, 2026, residents take a dip as cargo and commercial vessels lie at anchor in the Strait of Hormuz off Bandar Abbas. (Photo by Amirhossein KHORGOOEI / ISNA / AFP) /
In this picture obtained from Iran's ISNA news agency on June 8, 2026, residents take a dip as cargo and commercial vessels lie at anchor in the Strait of Hormuz off Bandar Abbas. (Photo by Amirhossein KHORGOOEI / ISNA / AFP) /
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Hormuz Shock Hits Gulf Economies, Saudi Arabia Takes Center Stage in 2026

 In this picture obtained from Iran's ISNA news agency on June 8, 2026, residents take a dip as cargo and commercial vessels lie at anchor in the Strait of Hormuz off Bandar Abbas. (Photo by Amirhossein KHORGOOEI / ISNA / AFP) /
In this picture obtained from Iran's ISNA news agency on June 8, 2026, residents take a dip as cargo and commercial vessels lie at anchor in the Strait of Hormuz off Bandar Abbas. (Photo by Amirhossein KHORGOOEI / ISNA / AFP) /

The global economy is entering an extremely sensitive phase in 2026 amid escalating geopolitical tensions in the Middle East, which have cast a heavy shadow over the fragile global recovery and reshaped the global credit and financial landscape.

At the heart of these turbulent developments, Gulf Cooperation Council economies find themselves directly confronting the fallout from disruptions in energy markets and supply chains resulting from the effective closure of the Strait of Hormuz, according to the World Bank. While this shock has placed the region’s growth under severe pressure, pushing overall growth rates toward near-zero levels, Saudi Arabia has emerged as the strongest expected economic performer among its neighbors, supported by financial buffers and flexible logistical capabilities that have strengthened its ability to contain the impact of the current crisis.

According to the World Bank Group’s June Global Economic Prospects report, rising inflationary pressures, higher energy prices, and tighter monetary policies are driving global growth to lower levels. These combined factors have led the bank to lower its global growth forecast for 2026 to 2.5 percent, compared with about 2.9 percent in 2025, marking a path below its previous January forecast of 2.6 percent.

The crisis has placed two-thirds of the world’s economies under downward revisions, amid stark warnings of a darker global economic scenario known as “fuel and financing stress,” which could push growth down to 1.3 percent if supply disruptions worsen and are accompanied by acute financial pressures. Estimates point to a partial recovery in 2027 to 2.8 percent, although that would remain below the average of the previous decade.

King Fahd Industrial Port in Yanbu, Saudi Arabia (SPA)

Energy Markets, Inflation, and the Impact of Hormuz

Energy markets are at the center of the crisis, having been directly affected by geopolitical developments, particularly the closure of the Strait of Hormuz, which has led to severe disruptions in global supplies.

The World Bank expects Brent crude to average about $94 per barrel in 2026, representing an increase of roughly 36 percent compared with 2025, provided disruptions subside by July.

The repercussions are not limited to oil. Fertilizer prices are also expected to rise, increasing pressure on global food prices and pushing global inflation to around 4 percent, compared with 3.3 percent in 2025, with the possibility of reaching 4.4 percent under the worst-case scenario.

Gulf and Middle East Economies on the Front Line

Saudi Arabia’s economic leadership in the latest June update was not unexpected. Figures published in the World Bank’s April report indicate that the Kingdom has not only succeeded in building solid “economic buffers” but has also turned current geopolitical challenges into an opportunity to accelerate structural adjustment, reflected in growth of 3.1 percent.

The updated estimates and figures released today reinforce that outlook and underscore this structural advantage. The World Bank revealed figures reflecting the depth of the regional shock as follows:

  • Middle East and North Africa growth declines: The bank expects overall growth in the region to fall sharply (excluding Iran due to exceptional uncertainty) to just 1.6 percent in 2026, compared with about 4 percent in 2025, representing a severe downward revision of 2.7 percentage points from last January’s forecast.
     
  • Near paralysis across Gulf and regional economies: Perhaps the bleakest indicator in the June report is the decline in overall growth among oil-exporting economies in the Middle East to just 0.3 percent in 2026, a downward revision of 4.3 percentage points from January’s forecast. This reflects disruptions to production and export lines. The figure marks a significant deepening of the shock compared with the bank’s April report, which had lowered regional growth forecasts at the time to 1.3 percent from an earlier projection of 4.4 percent. Current estimates show Gulf economies collectively slowing from 3.9 percent growth in 2025 to levels that constrain economic activity and approach zero in 2026, before rebounding toward recovery at around 5 percent in 2027 and 2028, driven by a recovery in trade flows and the launch of reconstruction projects.

Vessels are anchored in the Strait of Hormuz, as seen from Musandam, Oman, June 10, 2026. REUTERS/Stringer

The Geopolitical Structure Behind Diverging Performance

The World Bank attributed the sharp divergence in performance among Middle Eastern oil exporters to varying degrees of exposure to military activity and differences in policy buffers. The report noted that the slowdown would be less severe in Saudi Arabia due to its strategic ability to reroute oil exports away from logistical disruption through the East-West Pipeline leading to the Red Sea.

In a related context, the bank expects a more moderating slowdown in Oman, as it faces lower direct risks because its main ports lie outside the closed Strait of Hormuz. By contrast, the report links the sharp contraction in the economies of Kuwait, Qatar, and Iraq to a forced decline in oil production resulting from damage to energy infrastructure and the suspension of shipping through the strait, alongside surging shipping costs and rising defense and military spending pressures on government budgets.

Performance Across Gulf States

The updated estimates reinforce the figures anticipated by the World Bank in its April report regarding the performance gap among countries in the region as follows:

  • Saudi Arabia: Despite the World Bank deepening its downward revisions for the region as a whole in June to 1.6 percent due to the Hormuz shock, the Kingdom maintained its position as the region’s top performer. Growth is expected to reach 3.1 percent in 2026, down 1.2 percentage points from January estimates because of energy market conditions, before rebounding strongly to 4.9 percent in 2027.
     
  • United Arab Emirates: Growth expectations have been revised down by 2.7 percentage points since January. Growth is now expected to slow from 5 percent in 2025 to 2.4 percent in 2026, before rising again to 4.1 percent in 2027.
     
  • Qatar: Growth expectations for the Qatari economy have fallen sharply by 11.0 percentage points since January. The economy is now expected to contract by 5.7 percent, compared with previously projected positive growth of 5.3 percent, due to severe damage to liquefied natural gas supplies. Qatar is a key player in the global energy market, accounting for between 20 percent and 21 percent of global LNG supplies. The World Bank expects Qatari growth to rebound to 5.7 percent.
     
  • Kuwait: The economy is expected to contract by 6.4 percent, compared with a growth forecast of 2.6 percent in January. Kuwait relies entirely on the Strait of Hormuz to export its crude oil and petroleum products. The closure of the strait therefore means a complete shutdown of the country’s financial lifeline, immediately halting budget revenue inflows. The World Bank expects Kuwait’s economic growth to surge to 13.5 percent in 2027.
     
  • Bahrain: Growth expectations have been revised down by 1.8 percentage points since January. Growth is now expected to slow from 3.1 percent in 2025 to 1.3 percent in 2026 before rising again to 2.8 percent in 2027.
     
  • Oman: Growth expectations for Oman’s economy have been revised down by 1.2 percentage points since January. Growth is now expected to slow from 3.6 percent in 2025 to 2.4 percent in 2026 before increasing to 3 percent in 2027.

Perhaps the greatest shock lies in the freefall of the Iraqi economy, with growth expectations plunging from 6.5 percent to a steep contraction of 8.9 percent.

Egypt Defies the Downward Trend

In contrast to the sharp contraction affecting the budgets of oil-producing Gulf states, the World Bank raised its forecast for Egypt’s economic growth by 0.3 percentage points to 4.6 percent in 2026, before easing to 4 percent in 2027.

This relative recovery is attributed to Egypt’s logistical and geographic advantages, as a significant share of international trade and supply chains shifts toward alternative routes through the Red Sea and the Suez Canal to avoid disruption caused by the closure of the Strait of Hormuz. The diversity of Egypt’s economy and its lack of direct dependence on Gulf oil exports have also helped shield it from the immediate shock, alongside recent inflows of foreign direct investment and international support packages that have provided strong foreign-currency liquidity and enhanced the resilience of non-oil activity and domestic demand against geopolitical headwinds.

Diverging Outlooks

At the regional level, the data show varying performance across global regions. South Asia remains the fastest-growing region despite slowing to 6.3 percent, while growth in East Asia is projected at 4.2 percent and Sub-Saharan Africa at 4 percent.

Latin America is expected to grow by 2.2 percent, followed by Europe and Central Asia at 2.1 percent. Meanwhile, the Middle East and North Africa region is more heavily affected by the conflict, with growth slowing to 1.6 percent in 2026 before recovering to 5 percent in 2027.

Commenting on these difficult developments, World Bank Group President Ajay Banga said the greatest challenge facing governments today is achieving a careful balance between protecting current financial stability and preserving future growth opportunities.

Banga said the World Bank is working intensively to support affected countries through liquidity tools and emergency financing, while remaining fully prepared to provide additional support packages should the crisis worsen, with the aim of helping economies overcome the structural shock to energy markets and strengthen their capacity for sustainable recovery.


SpaceX on Cusp of Record IPO that Could Make Musk a Trillionaire

FILE - SpaceX's mega rocket Starship prepares for a test flight from Starbase in Boca Chica, Texas, Monday, Nov. 18, 2024. (AP Photo/Eric Gay, File)
FILE - SpaceX's mega rocket Starship prepares for a test flight from Starbase in Boca Chica, Texas, Monday, Nov. 18, 2024. (AP Photo/Eric Gay, File)
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SpaceX on Cusp of Record IPO that Could Make Musk a Trillionaire

FILE - SpaceX's mega rocket Starship prepares for a test flight from Starbase in Boca Chica, Texas, Monday, Nov. 18, 2024. (AP Photo/Eric Gay, File)
FILE - SpaceX's mega rocket Starship prepares for a test flight from Starbase in Boca Chica, Texas, Monday, Nov. 18, 2024. (AP Photo/Eric Gay, File)

SpaceX enters the final stretch Thursday before its expected trading on Wall Street as part of the biggest initial public offering in history, which could propel co-founder Elon Musk to trillionaire status.

The company will be the first out of the gates among the tech and AI giants eyeing public markets, with OpenAI and Anthropic expected to follow, as both have filed with regulators for their own market debuts, AFP said.

If all goes as expected, the space and rocket company co-founded by Musk in 2002 will begin trading on the Nasdaq exchange on Friday morning, with all eyes on how Wall Street will absorb the blockbuster IPO that could send tremors across global markets.

For high-profile companies, the first day of trading traditionally sees executives ring the opening bell to mark the start of the session -- in this case at New York's Times Square, home of the Nasdaq.

The IPO is Musk's biggest financial gamble yet, with his xAI company and the X social media platform (formerly Twitter) also included in the SpaceX offering after the multi-billionaire folded them into the company earlier this year.

The company will offer more than 555 million shares at an expected $135, placing SpaceX among Wall Street's most elite companies with a valuation of around $1.8 trillion.

The operation will become official on Thursday, including the pricing, with questions swirling over whether the company will raise its offer price amid reports that it attracted more than four times the available shares, according to Bloomberg.

Thirty percent of the shares will be reserved for retail investors, triple the amount that is typically allocated in IPOs, giving Musk fans a chance to fork over for a slice of the company.

- Data centers in space -

The success of the IPO rests squarely on investors' faith in Musk as a visionary entrepreneur. The tech multi-billionaire will serve as chief executive, chief technology officer and board chairman of the newly traded company.

The IPO is expected to mint thousands of new millionaires and many billionaires, with former and current employees -- and a long list of investors -- from the company's near quarter-century history looking to cash in.

The financials of the company are giving some on Wall Street pause, as the valuation largely depends on Musk delivering on promises worthy of science fiction, including putting data centers in space as well as people on Mars using as yet unproven technology.

While the company is growing fast -- revenue hit $18.7 billion in 2025 -- it is also losing money, producing a net loss of $4.9 billion.

In an extraordinary prediction, SpaceX's filing claims it can pull in over $28.5 trillion in revenue from its various markets.