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.
TT

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.



IEA Chief Warns Commercial Oil Inventories Are Depleting Rapidly, Only Weeks Left

Organization for Economic Cooperation and Development (OECD) Secretary-General Mathias Cormann and International Energy Agency (IEA) Executive Director Fatih Birol talk on the day of a G7 finance ministers' and central bank governors' meeting in Paris, France, May 18, 2026. (Reuters)
Organization for Economic Cooperation and Development (OECD) Secretary-General Mathias Cormann and International Energy Agency (IEA) Executive Director Fatih Birol talk on the day of a G7 finance ministers' and central bank governors' meeting in Paris, France, May 18, 2026. (Reuters)
TT

IEA Chief Warns Commercial Oil Inventories Are Depleting Rapidly, Only Weeks Left

Organization for Economic Cooperation and Development (OECD) Secretary-General Mathias Cormann and International Energy Agency (IEA) Executive Director Fatih Birol talk on the day of a G7 finance ministers' and central bank governors' meeting in Paris, France, May 18, 2026. (Reuters)
Organization for Economic Cooperation and Development (OECD) Secretary-General Mathias Cormann and International Energy Agency (IEA) Executive Director Fatih Birol talk on the day of a G7 finance ministers' and central bank governors' meeting in Paris, France, May 18, 2026. (Reuters)

Fatih Birol, head of the International Energy Agency, said on Monday that commercial oil inventories were depleting rapidly with only a few weeks' worth left due to the Iran war and the closure of the Strait of Hormuz to shipping.

Birol, who is participating in the Group of Seven finance leaders meeting in Paris, told reporters that the release of strategic oil reserves had added 2.5 million barrels of oil per day to the market, but said these reserves "are ‌not endless".

The ‌onset of the spring planting and summer ‌travel ⁠seasons in the northern ⁠hemisphere will drain inventories more quickly as demand for diesel, fertilizer, jet fuel and gasoline increases, Birol added.

Asked about his comments in the G7 meeting, he said he described "a perception gap in the markets between the physical markets and the financial markets" for oil.

Birol said that before the US and Israel launched attacks on Iran at ⁠the end of February, there was a major ‌surplus in the oil markets, and ‌commercial inventories were very high. But the situation has rapidly shifted due to ‌the war.

He said commercial inventories would last "several weeks, but we ‌should be aware of the fact that it is declining rapidly".

Last week, the IEA said global oil supply will fall short of total demand this year as the Iran conflict wreaks havoc on Middle East oil ‌production, and inventories were being drained at an unprecedented pace. The IEA had previously forecast a surplus this ⁠year.

Global observed ⁠oil inventories fell at a record pace in March and April, dropping by 246 million barrels, the IEA said in its latest monthly oil market report.

The 32-member IEA coordinated the largest-ever release of stocks from strategic reserves in March, agreeing to withdraw 400 million barrels in a bid to calm markets.

Around 164 million barrels had been released by May 8, it said.

Overall global oil supply will fall by around 3.9 million barrels per day across 2026 due to the war, the agency said, slashing its previous forecast, which had projected a 1.5 million bpd drop.


Operating Profits Drive Saudi Petrochemical Firms to Record 111% Jump in Earnings

SABIC’s manufacturing facility in Jubail (company website) 
SABIC’s manufacturing facility in Jubail (company website) 
TT

Operating Profits Drive Saudi Petrochemical Firms to Record 111% Jump in Earnings

SABIC’s manufacturing facility in Jubail (company website) 
SABIC’s manufacturing facility in Jubail (company website) 

Saudi-listed petrochemical companies posted a sharp improvement in financial performance during the first quarter of 2026, driven by a strong recovery in operating efficiency that pushed the sector’s net profits up 111.75 percent to more than SAR374.36 million ($92.57 million).

The turnaround reflected the success of major companies in adapting to global market changes, with the sector’s operating profits surging nearly fivefold to $548.97 million.

The strong momentum was fueled by higher average selling prices for most products, lower operating and administrative expenses, improved investment returns and a decline in non-recurring costs that had weighed on last year’s results.

Among the nine petrochemical companies listed on the Saudi stock exchange, Tadawul, six posted net profits: SABIC, SABIC Agri-Nutrients, Yanbu National Petrochemical Co. (Yansab), Saudi Industrial Investment Group (SIIG), Advanced Petrochemical Co. and Alujain Corp.

Three companies posted losses: Sahara International Petrochemical Co. (Sipchem), National Industrialization Co. (Tasnee) and Saudi Kayan Petrochemical Co.

According to filings on Tadawul, SABIC Agri-Nutrients recorded the highest profits in the sector, with first-quarter earnings rising 24.57 percent to SAR1.23 billion from SAR985 million a year earlier. The company attributed the increase to higher average selling prices for most of its products.

SIIG posted the second-highest profits, reporting SAR252 million in first-quarter earnings compared with SAR18 million in the same period last year, a jump of 1,300 percent.

The company said profits rose because of a significant increase in its share of earnings from jointly managed companies, supported by exceptional improvements in product selling prices and lower depreciation expenses after reassessing the useful life of fixed assets.

Advanced Petrochemical ranked third among profitable companies despite a 58.33 percent decline in earnings, posting a net profit of SAR30 million compared with SAR72 million a year earlier.

The company attributed the drop to depreciation expenses, fixed costs and financing expenses linked to the start of operations at Advanced Polyolefins Industry Co.

The sector’s total operating profits rose nearly fivefold in the first quarter, climbing 492 percent to SAR2.06 billion from SAR347.56 million during the same period in 2025.

SABIC led the sector in operating profits, recording SAR1.4 billion in the first quarter, up more than 383 percent.

SABIC Agri-Nutrients came second with operating profits of SAR1.17 billion, an increase of 36.29 percent, while SIIG ranked third with SAR252 million in operating profit, marking a rise of 1,160 percent.

Financial markets analyst and member of the Saudi Economic Association Sulaiman Al-Humaid Al-Khalidi told Asharq Al-Awsat that the petrochemical sector saw a notable turnaround in the first quarter as major firms regained a significant portion of profitability momentum, supported by better product prices, improved operating efficiency and easing exceptional pressures that had weighed on results last year.

He noted that the sharp rise in earnings was driven by several factors, notably higher average selling prices for petrochemical products and fertilizers, especially at SABIC Agri-Nutrients, which benefited from strong global demand and stable fertilizer markets.

Lower operating expenses also played a major role in boosting results, particularly at SABIC, which returned to profitability after a decline in non-recurring costs and lower administrative and research expenses.

Al-Khalidi added that SIIG benefited from exceptional product pricing, stronger contributions from joint ventures and lower depreciation expenses, allowing it to post one of the sector’s strongest profit jumps.

At the same time, companies such as Saudi Kayan and Tasnee continued to face challenges despite reducing losses, reflecting a gradual improvement in operating conditions as some input costs declined and factories resumed operations after maintenance and expansion work.

Al-Khalidi said the sector appeared headed toward greater stability compared with 2024 and 2025, supported by improving global industrial demand, recovering economic activity in major markets and continuing Saudi industrial and economic transformation projects.

He added that any further rise in oil and energy prices would support profit margins for petrochemical companies as firms focus on improving operating efficiency, reducing costs and expanding higher value-added products.

He continued that the sector appeared to be entering a phase of “smart gradual recovery” rather than a temporary boom, potentially allowing companies to achieve more balanced and sustainable financial results in coming quarters.

Selective improvement

Mohamed Hamdy Omar, chief executive of G World, told Asharq Al-Awsat that the sector’s financial performance improved selectively rather than uniformly.

He said companies tied to strong pricing conditions or better operating factors posted stronger results, while firms burdened by high fixed costs or affected by maintenance and expansion projects remained under pressure.

He pointed to SABIC Agri-Nutrients benefiting from higher average selling prices despite lower sales volumes and weaker contributions from joint projects, indicating pricing had a greater impact on profitability than volumes.

Omar added that SIIG’s sharp profit increase was driven by stronger earnings contributions from jointly managed companies and lower depreciation expenses following the reassessment of asset lifespans.

He said SABIC’s return to profitability was largely driven by lower non-recurring expenses that had burdened the comparison period in 2025, along with lower general and research expenses.

Omar further noted that profit growth across the sector was mainly driven by three factors: improved selling prices for some products, especially fertilizers; stronger operating and investment performance at some companies; and lower non-recurring costs, which particularly benefited SABIC.

Loss-making companies, meanwhile, remained under pressure from lower sales volumes, weaker prices, higher financing expenses and maintenance and expansion costs, as seen at Tasnee and Saudi Kayan, he said.

Omar expected the petrochemical sector to remain highly sensitive in coming quarters to global price movements in petrochemicals, fertilizers and energy markets.

“Volatility between companies may continue even if the overall trend remains positive,” he said, adding that stronger firms with pricing power and operating efficiency, such as SABIC Agri-Nutrients, would be best positioned to maintain healthy margins if market conditions remain supportive.

Omar added that SABIC would remain a key factor in shaping the sector’s direction, though sustaining profitability would depend more on reducing non-recurring items and improving the global industrial cycle than on any single factor.

“The sector is entering a phase of improving operating quality rather than merely a rapid cyclical recovery,” he said, adding that the sustainability of the recovery would depend on prices, global demand and disciplined capital and operating spending.

 

 


G7 Finance Chiefs Meet to Seek Common Stance on Unstable Ground

French Finance Minister Roland Lescure admits the discussions facing G7 leaders 'are not easy'. Dimitar DILKOFF / AFP
French Finance Minister Roland Lescure admits the discussions facing G7 leaders 'are not easy'. Dimitar DILKOFF / AFP
TT

G7 Finance Chiefs Meet to Seek Common Stance on Unstable Ground

French Finance Minister Roland Lescure admits the discussions facing G7 leaders 'are not easy'. Dimitar DILKOFF / AFP
French Finance Minister Roland Lescure admits the discussions facing G7 leaders 'are not easy'. Dimitar DILKOFF / AFP

Finance chiefs from the G7 industrialized nations gather in Paris on Monday for two days of talks aimed at forging a united front as the Middle East war roils economic prospects worldwide.

France, which currently chairs the rotating presidency of the Group of Seven, faces the tricky task of keeping dialogue open as trade feuds spurred by US President Donald Trump's tariff blitz compound geopolitical tensions.

Reducing reliance on China's vast holdings of rare earths -- crucial for the AI boom that has underpinned economic growth in recent years -- is also at the top of the agenda.

"The way the global economy has developed over the past 10 years now is clearly not sustainable," French Finance Minister Roland Lescure told journalists last week.

He noted in particular the surging US budget deficit, a lack of technological innovation in Europe, and China's efforts to counter slumping consumer spending and industrial over-capacity that has pushed its companies to elbow into overseas markets.

"Multilateralism can work," Lescure said, but "these discussions are not easy -- I'm not going to tell you that we agree on everything, including obviously with our American friends".

Trump's combative, transactional approach to dealing with allies and rivals alike has unnerved G7 leaders as they grapple with the threat of both stagnant growth and surging inflation stemming from the war in the Middle East.

A final press conference by the finance chiefs is set for midday Tuesday.

German Finance Minister Lars Klingbeil said the G7 was "the right framework" for talking to the United States about ending the Iran war.

"This war is massively damaging economic development. That is why everything must be done to bring the war to a permanent end, to stabilize the region again, and to ensure free shipping lanes through the Strait of Hormuz," he said in a statement.

- 'Economic security' -

Even a shared recognition of the challenges would be considered a victory for the French government, which is hoping to issue two joint statements after the discussions.

Finance ministers from Kenya, Brazil, India and South Korea have also been invited for talks on Tuesday to lay the groundwork for the G7 summit meeting in Evian, France, on June 15-17.

The talks come days after Trump's trip to Beijing for talks with President Xi Jinping failed to provide a clear breakthrough on easing tariffs or ending the war in the Middle East.

China has been making inroads in much of the G7 nations' backyards, and is increasingly willing to play hardball on trade as a key supplier of both raw materials and inexpensive finished goods.

"Up to now, the problem of macroeconomic imbalances was addressed... with regards to global financial stability," said Pierre Jaillet, a researcher at France's Institute for International and Strategic Affairs (IRIS).

But now officials are looking "through the optic of economic security: trade surpluses or deficits can reflect vulnerabilities or dependencies, in particular with critical minerals or energy", and the risk of supply chain disruptions, Jaillet told AFP.

The G7 goal is to "ensure that we don't depend on any one country -- China, without naming names -- for our rare earth supplies", Lescure said.

And oil and gas security has become even more crucial with the Middle East war.

"We must do for critical materials what we did with energy in the 1970s," and find common cause for dealing with any crisis.

- 'Common toolbox' -

France is hoping to create a "common toolbox" to combat market disruptions to key raw materials, Lescure said, via strategic trade deals or interventionist measures such as price floors, quotas or tariffs.

It also wants to promote "multilateral projects" among countries to develop their own extraction and refining capabilities, such as a French-Japanese factory to produce and recycle rare earths and magnets and other minerals under construction in southwest France.

The French state has invested 106 million euros ($124 million) in the project, which aims to provide all of France's needs by 2030.

Using financial aid to strike deals in developing countries that encourage private investments is also a way forward, Lescure said.