The US-Iran war has reshaped investment priorities across the region, forcing Gulf economies to contend with its repercussions for trade and capital flows. In Saudi Arabia, efforts to diversify investment and broaden the range of targeted sectors continue, with growing attention to strategic industries and advanced technologies, including the space industry.
The Kingdom's ambitions in the sector received a further boost on November 3, when the Cabinet, chaired by Crown Prince and Prime Minister Mohammed bin Salman, approved the National Space Policy. The move aims to support the development of a national space ecosystem and advance its scientific, technological and investment activities.
The decision comes as the Communications, Space and Technology Commission (CST) projects that Saudi Arabia's space economy will grow from SAR 33 billion ($8.8 billion) in 2024 to SAR 119 billion ($31.7 billion) by 2035, representing a compound annual growth rate of 12%. The domestic space market is expected to reach SAR 21 billion ($5.6 billion).
Experts told Asharq Al-Awsat that Saudi Arabia continues to strengthen its position as a destination for high-value investment, driven by the objectives of Vision 2030, which remain the principal catalyst for investment activity even during regional and international crises.
They said turmoil in the region, including threats to shipping through the Strait of Hormuz and Bab Al-Mandab, had affected regional economies but had not halted Saudi efforts to develop strategic sectors, including space and satellite industries.
The experts noted that expanding partnerships and investment agreements during 2026 reflected growing opportunities in the sector, given the links between space technologies and several vital industries and their increasing importance to economic development and national security.
They expect Riyadh to strengthen its position in the global space industry over the coming years and called for the creation of a dedicated investment fund to support companies and projects operating in the sector.
Building a Domestic Space Industry
Engineer Frank M. Salzgeber, former Acting Vice Governor for the Space Sector at Saudi Arabia's Communications, Space and Technology Commission (CST), believes the Kingdom has the foundations needed to become a leading player in the space economy.
Speaking to Asharq Al-Awsat, he expressed strong confidence in the future of Saudi Arabia's space economy, pointing to existing demand and the opportunity for the Kingdom to assume a leadership role in the industry.
Salzgeber, an investor in New Space companies and chief executive of Altairi Space, said data from CST and SpaceTech Gulf showed that the number of organizations and companies operating in Saudi Arabia's space sector had doubled in recent years to more than 425 entities.
He noted that space data analytics had recorded the strongest growth.
According to Salzgeber, space has become closely associated with national security and sustainable development, while also emerging as one of the world's promising commercial markets.
He attributed the development of Saudi Arabia's space ecosystem to three principal institutional pillars.
The first is CST, which serves as the regulatory authority, developing regulations and policies, strengthening the ecosystem, building national capabilities and providing market data.
The second is the Saudi Space Agency, which plays a central role in enabling scientific activities and expanding international partnerships.
The third is Neo Space Group (NSG), a subsidiary of the Public Investment Fund, which leads commercial activities in the national space sector.
Salzgeber, who previously served as head of innovation and ventures at the European Space Agency, identified a major investment opportunity in addressing the gap in domestic manufacturing of complete commercial satellites.
He called for a localization target of 67.5% of the value of space-sector contracts, arguing that such a measure would help establish a domestic industrial base capable of meeting local demand and expanding into international markets.
He said Saudi small and medium-sized enterprises could benefit from offset programs associated with space and defense contracts, enabling them to supply more components and technologies to international companies.
Salzgeber expressed hope that Saudi companies would eventually manufacture space components for US defense and aerospace company Lockheed Martin, highlighting the potential for domestic manufacturers to integrate into global supply chains.
He emphasized the importance of directing investment toward hardware manufacturing rather than focusing exclusively on services and applications, arguing that developing domestic production capabilities was essential to establishing a fully integrated space industry.
He also urged major venture capital firms to expand financing for companies operating in the sector with links to the Saudi market.
Assessing the Kingdom's strengths, Salzgeber pointed to its geopolitical position, which could make it a trusted partner for a wide range of international players.
He suggested Saudi Arabia could become a new Switzerland in the space industry, supported by its young talent and private capital.
He also called for a specialized space investment fund to provide financing for startups and industrial projects, helping turn emerging opportunities into productive and commercial ventures.
Space Strengthens Links Across Industries
Dr. Abdul Rahman Baashen, head of the Al-Shorouk Center for Economic Studies in Jazan, said Vision 2030 had established programs and initiatives that strengthened the Saudi economy's ability to withstand shocks and helped create a development and investment response capable of adapting to regional changes, including the consequences of the ongoing war.
Speaking to Asharq Al-Awsat, Baashen said Saudi investment priorities were increasingly focused on developing strategic industries and addressing gaps in the country's industrial and technological ecosystem.
He noted growing interest in investments supporting sustainable development, particularly artificial intelligence, technology-intensive industries and space.
Baashen said several recent agreements and partnerships had focused on the space, defense and security sectors.
He explained that the space industry was particularly important because of its connections to numerous economic and industrial activities and its role in supporting essential services and stimulating growth.
Developing the sector, he argued, could help sustain investment and commercial activity in Saudi Arabia.
Baashen attributed the continued momentum in investment to Vision 2030, which he described as the primary driver of investment even during regional and international crises.
He said current developments were creating new opportunities for initiatives and projects involving advanced technologies and space.
He stressed that the regional war had not interrupted Saudi efforts to enhance the Kingdom's investment appeal and competitiveness, noting continued foreign investor interest in emerging sectors, including space.
As evidence, he cited the shift in Saudi Arabia's net foreign direct investment from an outflow of approximately $1.7 billion in the first quarter of the year to an inflow of $4 billion in the second quarter.
He also pointed to an increase in foreign exchange reserves to $440.7 billion at the end of September, representing annual growth of 3.7%.
Billions of Riyals in Space Investment Expected Through 2029
Saudi businessman Abdullah bin Zaid Al-Meleihi, chairman of Saudi Excellence Holding Company, said the Kingdom was entering a new phase of investment in space industries, supported by rapid technological advances and Vision 2030 objectives aimed at localizing strategic industries and expanding the private sector's role.
Speaking to Asharq Al-Awsat, Al-Meleihi said changes in modern warfare, particularly the growing reliance on artificial intelligence, cybersecurity, unmanned aircraft and satellites, had helped redirect global investment and created economic and industrial opportunities for domestic investors and companies.
He added that the repercussions of the regional war had not prevented Saudi Arabia from developing strategic industries and might even have contributed to a realignment of investment priorities.
Al-Meleihi said the target of localizing more than 50% of military spending by 2030 would create substantial opportunities for investment partnerships between the public and private sectors, including in space industries and related technologies.
He noted that Saudi investors had recognized early on the importance of moving into technology and strategic industries, prompting growing interest in international partnerships focused on transferring knowledge and advanced technologies and establishing specialized manufacturing capabilities within the Kingdom.
He stressed that opportunities extended beyond factories and industrial projects to include research and development, training and the preparation of Saudi professionals.
Al-Meleihi also emphasized the importance of public-private cooperation in building an advanced industrial and technological ecosystem.
He predicted that the space industry would attract billions of riyals in investment between 2027 and 2029, supported by expanding international partnerships and rising demand for advanced technologies.
He stressed that these projections represented his own investment outlook rather than official figures for approved investments.
Al-Meleihi said Saudi Arabia possessed the economic, industrial and investment capabilities needed to become a major player in defense, security and space industries.
He argued that the Kingdom could move from consuming technology to developing, manufacturing and localizing it, strengthening its position as a regional hub for these industries.
He also noted that changes in warfare were reshaping not only military doctrines but also the direction of global capital flows.
He expects defense, security and space industries to become among Saudi Arabia's most prominent areas of strategic investment in the coming period.
Al-Meleihi said the Kingdom was entering a new economic and industrial era in which the future would favor those investing today in technology, knowledge and advanced industries.
He added that Saudi Arabia, under Vision 2030, was well positioned to strengthen its standing among countries with significant influence in these sectors, both regionally and internationally.
