Saudi Arabia Builds its Own Digital Sovereignty Model

A woman stands in front of an information screen at the LEAP tech exhibition in Saudi Arabia (SPA)
A woman stands in front of an information screen at the LEAP tech exhibition in Saudi Arabia (SPA)
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Saudi Arabia Builds its Own Digital Sovereignty Model

A woman stands in front of an information screen at the LEAP tech exhibition in Saudi Arabia (SPA)
A woman stands in front of an information screen at the LEAP tech exhibition in Saudi Arabia (SPA)

In a world where digital borders are blurring and countries are racing to control data and build technological power, Saudi Arabia has chosen to carve out its own digital path.

Through an ambitious strategic vision, the Kingdom has launched a network of policies, investments, and high-value partnerships that have turned it into a global model for digital transformation. It ranked first in the International Telecommunication Union’s 2025 Digital Readiness Framework, scoring 94 out of 100.

But the score tells only part of the story. More important is what it signals, a deep shift in how Saudi Arabia views digital sovereignty. It is no longer just a shield for protecting data. It has become a driver of growth and a tool for shaping the future.

To understand that shift, the concept itself must be redefined.

Ayman AlRashed, IBM’s regional vice president in Saudi Arabia, says digital sovereignty is often wrongly reduced to a technical question of where data is stored.

“It is important to look at digital sovereignty as an integrated operational capability,” AlRashed told Asharq Al-Awsat.

He said it covers an organization’s ability to control and govern its data, operate its digital systems, and manage outcomes with confidence and continuity over the long term.

That broader definition gives digital sovereignty a far deeper meaning. It is not a wall built to stop data from leaving. It is a full governance system that ensures accountability, access controls, oversight and auditability, while preserving the reliability of digital systems and their ability to scale securely and in compliance with regulations.

Mohamed Talaat, vice president for Saudi Arabia, Egypt, North Africa and the Levant at Dell Technologies, said the Kingdom has translated that approach into practical policy through clear regulatory frameworks, led by the Personal Data Protection Law.

He told Asharq Al-Awsat that the law helped create an environment that supports global expansion while maintaining strict control over data.

Saudi Arabia has also made itself more attractive to international technology companies through economic zones, tax incentives, and partnerships with cloud service providers.

How fintech flourished

The fintech sector offers one of the clearest examples of how digital sovereignty is reshaping the Saudi economy.

The sector has expanded sharply in recent years. AlRashed says digital sovereignty was one of the main factors behind that growth.

The reason is straightforward. Once sensitive financial data could be processed and stored inside the Kingdom under local regulatory frameworks, investors, banks, insurers and end users became more confident in fintech solutions.

Digital sovereignty removed one of the biggest barriers to growth, concern over where sensitive data sits and who controls it.

Crucially, that did not come at the expense of innovation. IBM provided sovereign and hybrid cloud solutions that allow financial institutions to keep sensitive data locally while still using advanced cloud capabilities.

That model gave fintech firms a practical way to balance fast innovation with strict regulatory compliance, without sacrificing either.

From compliance to expansion

Digital sovereignty has not only helped large institutions. It has also changed the equation for Saudi startups.

AlRashed says that storing and processing data within the Kingdom under clear regulatory frameworks has enabled startups to launch and grow while remaining compliant from day one.

But the economic impact goes beyond easier compliance. Digital sovereignty has strengthened trust among customers and partners in local solutions. That has helped speed up the adoption of digital products, expand customer bases, improve access to investment, build partnerships with major institutions, and increase the likelihood of early revenue.

AlRashed says the deeper impact lies in preparing startups for regional expansion.

By building digital solutions on strong, sovereign standards within the Kingdom, Saudi companies have gained a clear competitive edge, especially as regulatory policies across several regional markets converge. What they built locally has become easier to export and scale.

A delicate balance

One of the toughest questions is how Saudi Arabia managed to attract major global technology firms to invest locally without giving up control over national data.

Talaat says the Kingdom struck a careful balance. It offered international companies a clean regulatory environment and attractive incentives, while imposing strict guarantees to keep sensitive data under national control.

He said this approach has taken practical form in a secure local infrastructure that supports national artificial intelligence agendas.

One example is Dell Technologies’ opening in 2024 of a new merger and distribution center in Dammam, part of a multimillion-dollar investment to strengthen local operations and supply chain resilience.

The move reflects a model in which global companies become partners in building sovereignty, not threats to it.

A regional digital hub

What will this ecosystem look like by 2030?

Talaat sketches an ambitious picture, a sovereign digital economy expected to be the largest in the Middle East, with artificial intelligence alone forecast to contribute $135 billion to the economy and local data center capacity exceeding 1.5 gigawatts.

Saudi Arabia is working to cement its position as a global hub for cloud computing, artificial intelligence innovation and sustainable technology manufacturing, supported by integrated smart cities and secure sovereign data systems.

AlRashed says the Kingdom has a real chance to move beyond the domestic arena and help shape global models for digital sovereignty through a growing network of local, regional and international partnerships.

That marks a shift from importing technology to exporting models and standards.

Still, both men acknowledge that the vision faces a central challenge, closing human skills gaps.

Advanced infrastructure is essential, but it is not enough. Saudi Arabia also needs deep, parallel investment in developing national talent capable of managing and leading its digital future.

In the end, Saudi Arabia’s experience shows that digital sovereignty is not a defensive strategy designed to cut data off from the world. It is a way for countries and companies to engage with global innovation from a position of strength, not dependence.



Swiss and Chinese Reach Agreement on Updated Free Trade Deal

FILE PHOTO: A China yuan banknote featuring late Chinese chairman Mao Zedong and a computer keyboard are seen reflected on an image of Chinese flag in this illustration picture taken November 1, 2019.  REUTERS/Florence Lo/Illustration/File Photo
FILE PHOTO: A China yuan banknote featuring late Chinese chairman Mao Zedong and a computer keyboard are seen reflected on an image of Chinese flag in this illustration picture taken November 1, 2019. REUTERS/Florence Lo/Illustration/File Photo
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Swiss and Chinese Reach Agreement on Updated Free Trade Deal

FILE PHOTO: A China yuan banknote featuring late Chinese chairman Mao Zedong and a computer keyboard are seen reflected on an image of Chinese flag in this illustration picture taken November 1, 2019.  REUTERS/Florence Lo/Illustration/File Photo
FILE PHOTO: A China yuan banknote featuring late Chinese chairman Mao Zedong and a computer keyboard are seen reflected on an image of Chinese flag in this illustration picture taken November 1, 2019. REUTERS/Florence Lo/Illustration/File Photo

Switzerland and China have completed negotiations on an updated free trade deal which will increase Swiss access to its third biggest trading partner, Swiss officials said on Thursday.

Swiss president Guy Parmelin and China's Commerce Minister Wang Wentao announced the conclusion of the talks after a meeting in Bern.

Under the agreement, 99.8% of Swiss exports can enter the Chinese market duty free, upgrading an existing deal where the terms applied to only around half of Swiss shipments, Reuters reported.

Almost all Chinese exports to Switzerland are duty free under the existing 2014 free trade agreement between the two countries, Beijing's first such deal with an economy in continental Europe.

Other areas covered in the new agreement include rules of origin and trade facilitation, trade in services, digital trade, competition, and economic and technical cooperation.

China is Switzerland's third biggest trade partner after Germany and the United States, with bilateral trade amounting to 46 billion Swiss francs ($57.6 billion) so far in 2026.

Trade between the two countries has expanded from 31.7 billion francs in 2015 to 51.2 billion francs last year, according to figures from the Swiss customs office, with China a big market for Swiss chemicals, pharmaceuticals, precision instruments and watches.

Once the legal review has been completed, a signing of the deal is expected later this year, before the domestic approval processes in each country take place.


US Unemployment Claims Dropped to 206,000 Last Week with Layoffs Still Sparse

A "now hiring" sign is displayed on a local business after, US employment growth slowed more than expected in July, in Encinitas, California, US August 1, 2025. REUTERS/Mike Blake
A "now hiring" sign is displayed on a local business after, US employment growth slowed more than expected in July, in Encinitas, California, US August 1, 2025. REUTERS/Mike Blake
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US Unemployment Claims Dropped to 206,000 Last Week with Layoffs Still Sparse

A "now hiring" sign is displayed on a local business after, US employment growth slowed more than expected in July, in Encinitas, California, US August 1, 2025. REUTERS/Mike Blake
A "now hiring" sign is displayed on a local business after, US employment growth slowed more than expected in July, in Encinitas, California, US August 1, 2025. REUTERS/Mike Blake

Fewer people applied for US unemployment benefits last week, another sign that layoffs remain low and that most Americans enjoy job security.

The Labor Department reported Thursday that jobless claims dropped to 206,000 last week from a revised 212,000 the week before. The four-week average of claims, which smooths out week-to-week ups and downs, ticked up to 204,000 last week from 199,750.

Claims for jobless benefits are a proxy for layoffs, and economists watch them because they can be a harbinger for where the job market is headed. For the past year, claims have been at a historically low range of around 200,000 to 230,000 a week.

“The labor market has yet to show any sign of wear and tear from the surge in oil prices since the start of the war with Iran and the global energy supply shock,” Carl Weinberg, chief economist at High Frequency Economics, wrote in a commentary, The AP news reported.

The number of people collecting unemployment benefits the week that ended Aug. 8 rose to 1.8 million from 1.78 million the week before.

The US unemployment rate is low at 4.1%, partly because the economy has proved resilient in the face of higher energy prices. But it’s also because President Donald Trump’s immigration crackdown and the ongoing retirement of baby boomers mean that fewer people are competing for jobs: More than 1.3 million people have dropped out of the US labor force over the past year.

The job market is tough for those looking for their first job and for those who lost their jobs and are looking for new work. At the same time, companies, remembering the worker shortages that followed the end of COVID-19 lockups, are still reluctant to let go of staff; but they aren’t eager to take on new workers. Economists regularly refer to a “no hire, no fire″ job market.

In July, companies, government agencies and nonprofits together cut 23,000 jobs. So far this year, employers are adding 61,000 jobs a month. That is an improvement on the 9,700 they averaged last year — the weakest hiring outside a recession since 2002. The lingering effects of high interest rates and Trump’s erratic trade policies discouraged companies from hiring in 2025.

Hiring this year remains well below the 166,00 monthly jobs created, on average, in 2023 and 2024, let alone the 491,000 a month recorded during the 2021-2022 hiring boom that followed pandemic lockdowns.


IMF Welcomes Lebanon Bank Law Changes as 'Major Step' 

Lebanese Central Bank headquarters in Beirut (Reuters)
Lebanese Central Bank headquarters in Beirut (Reuters)
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IMF Welcomes Lebanon Bank Law Changes as 'Major Step' 

Lebanese Central Bank headquarters in Beirut (Reuters)
Lebanese Central Bank headquarters in Beirut (Reuters)

The International Monetary Fund has welcomed the Lebanese parliament's passing of amendments to a bank resolution law as a major step, but challenges to implementing the law could further delay recovery for an economy battered by years of financial collapse and the conflict with Israel.

The reforms are among the IMF's requirements for Lebanon to access funding to bring government debt out of default after decades of profligate spending by the country's ruling elite, sending the economy into a tailspin in late 2019. Banks imposed sweeping capital controls, locking depositors out of their savings, and stopped issuing loans.

In January the IMF had demanded changes to the draft rescue law, Lebanon's Prime Minister Nawaf Salam told Reuters at the time.

Now, the bank resolution law aims to address vast funding shortfalls in the financial system and is among a set of measures that ultimately aim to fix the banking sector and allow depositors who have been frozen out of their savings to gradually recover their money.

“We met 99% of what they wanted,” legislator Alain Aoun, who sits on Parliament’s Finance and Budget Committee, told Reuters.

The most notable amendments to the law include changes to the Central Bank’s governance procedures. The makeup of the Higher Banking Commission – a governing body within the Central Bank — will be altered, Aoun said. The amendments empower the body to “decide the fate of Lebanon’s banks,” and would determine if a bank requires restructuring or liquidation and any further steps to rehabilitate it.

Federico Lima, the IMF representative in Lebanon, said on Wednesday that the "effective implementation of this new bank resolution framework is critical."

"In addition, we are continuing discussions with the Lebanese authorities on the improvements needed to align the draft Financial Stabilization and Depositor Recovery (FSDR) law with international principles," he added.

In 2022, the government put losses from the financial crisis at about $70 billion, a figure that analysts and economists forecast is now likely to be higher.

Last week, the parliament passed amendments to the law, but it would still be pending approval by the Lebanese president.

The possibility of members challenging the law before the Constitutional Council — which has precedent for annulling provisions of earlier financial legislation — could also bring further delays.

The draft had already undergone several rewrites because of competing demands from different financial institutions; the IMF called on Lebanon to improve the law to bring it in line with international standards and consider tax reforms to spark public spending on reconstruction efforts.

The World Bank ranks the Lebanese economic crisis among the worst globally since the mid-19th century. Depositors were frozen out of dollar accounts and the Lebanese pound fell by more than 90%. Additionally, the war with Israel was estimated to have caused $7 billion in damages.

"This is the only country in the world that has had a banking crises for seven years and has not tried to find a solution," a senior Lebanese official told Reuters. "Staying where we are shouldn't be an option."