In a striking move, Saudi Arabia’s king issued a royal order on Thursday relieving Investment Minister Khalid Al-Falih of his post and appointing Fahad Al-Saif as his successor, as part of sweeping ministerial and administrative changes.
The kingdom is facing financial pressure and challenges linked to several of the mega-projects embedded in Vision 2030—the flagship plan launched by Crown Prince Mohammed bin Salman, the country’s de facto ruler, to diversify Saudi Arabia’s sources of income.
Al-Falih, who previously served as minister of energy, was appointed minister of investment in 2020, at a time when Saudi Arabia was seeking to raise net foreign direct investment inflows to around $100 billion annually by 2030. However, official figures for 2024 show that the kingdom achieved only about one-third of that target, reaching roughly $32 billion. The royal decree stipulated that Al-Falih would be appointed minister of state and a member of the Council of Ministers.
By contrast, Al-Saif previously headed the General Department for Investment Strategy and Economic Studies at the Public Investment Fund (PIF), which manages assets valued at approximately $925 billion.
For some time, Riyadh has been working to reorder its investment priorities, with an accelerating focus on artificial intelligence, alongside a reassessment of some of the massive projects that attracted global attention in recent years, most notably the NEOM project.
Andrew Leber, a professor of political science and Middle East and North Africa studies at Tulane University, says Al-Falih’s retention as minister of state “suggests that the crown prince is not personally displeased with him,” a factor that will place pressure on the new minister to find ways to improve net foreign direct investment inflows.
Tim Callen, a visiting fellow at the Arab Gulf States Institute in Washington, describes Fahad Al-Saif’s appointment as an example of “leadership recalibration.” He notes that the new minister “has deep familiarity with the Public Investment Fund … and is also well known among foreign investors.”
Since the launch of Vision 2030, Saudi leadership has bet on reshaping the economy away from total dependence on oil by developing sectors such as tourism, entertainment, technology, and industry. The strategy has achieved tangible progress according to several indicators, including a higher contribution from the non-oil sector to GDP and increased female participation in the labor market.
The kingdom began scaling back some of its mega-projects at the start of 2026. While initial projections for “The Line” envisioned housing 1.5 million residents by 2030, recent reports indicate that the target has been reduced to fewer than 300,000.
A $5 billion contract in NEOM was canceled just one day before its official signing ceremony. The first phase of “The Line,” originally planned to stretch 170 kilometers, has also been cut to just five kilometers by 2030, following a series of delays and reports of inflated salaries for foreign executives and what were described as toxic working conditions.
These changes come as oil prices fall below $70 per barrel, while the International Monetary Fund and other experts estimate that Riyadh needs oil prices above $90 per barrel to balance its budget and continue advancing Vision 2030.
Although some Saudi observers have said that ministerial reshuffles are routine and carry no hidden implications, others see them as tantamount to an admission of failure.
Saudi researcher Abdulaziz Al-Khamis of the Middle East Institute says Al-Falih’s dismissal is “not a rotation of posts, but a tacit acknowledgment that the rhetoric of an investment boom exceeded reality.” In a post on X, he added that the problem “is not one individual, but a mindset of exaggeration first, then searching for results later.”
Matthew Martin, an analyst at the US-based outlet Semafor, describes Al-Falih as “one of the most candid members of the Saudi government,” noting that he had recently questioned the feasibility of some Vision 2030 projects.
On Monday—two days before his dismissal—Al-Falih said that “the emergence of new priorities, such as Saudi Arabia hosting the 2034 World Cup, and the declining viability of certain projects like ‘The Line,’ necessitate a reordering of priorities.”
Speaking at a discussion session during the “Private Sector Forum 2026,” organized by the Public Investment Fund in Riyadh, he called for “improving quality of life—not only for visitors, but for residents of the areas where stadiums will be located” to host the World Cup.
Martin believes the task facing the new investment minister will not be easy, as he will need to work harder “to make Saudi Arabia a country people want to invest in, not one they feel compelled to invest in.”
Political analyst and adviser Zayed Al-Omari, however, told Alhurra that the ministerial changes amount to “administrative rotation in senior positions … a mechanism typically used every four years.” Saudi writer Duham Al-Anazi likewise confirmed that most of the decisions fall under a redistribution of roles.
According to the Saudi Press Agency (SPA), the royal orders included a series of dismissals and appointments in senior leadership positions, spanning governors, ministers, and heads of judicial bodies.
The crown prince’s economic policies have sparked debate within Saudi policy circles about the gap between declared ambitions and execution capacity, especially amid intensifying regional competition to attract investment.
Observers believe Al-Saif’s appointment could enhance coordination between the Ministry of Investment and the Public Investment Fund, reduce overlap in roles, and reshape foreign investment priorities to better align with available financing capacity.
Forecasts suggest the focus will shift toward sectors with relatively faster returns—such as data centers, cloud computing, and renewable energy—rather than long-horizon, high-risk real estate mega-projects.
In 2019, Saudi Arabia announced national strategies for artificial intelligence, aiming to become a regional hub in the field, with plans to train tens of thousands of specialists and attract investments worth billions of dollars.
Callen told Alhurra that scaling back certain mega-projects is “a positive indicator of adjusting plans to changing circumstances,” expressing hope that this would lead to “a more sustainable investment strategy in a low-oil-price environment.”
Leber, meanwhile, argues that the pivot toward artificial intelligence reflects a blend of strategic ambition and financial realism.
“Over the past few years, Saudi leadership has given growing priority to establishing a foothold in rapidly evolving AI technologies, at a time when cost overruns and logistical challenges have raised doubts about some heavily promoted mega-projects,” Leber told Alhurra.
“With mounting pressure on the budget, the kingdom has begun trimming its financial commitments to some questionable mega-projects in favor of focusing on more promising sectors,” he added.
Vision 2030 was launched in 2016 under the leadership of Crown Prince Mohammed bin Salman with the aim of reducing dependence on oil—which accounts for around 40 percent of GDP—and included the creation of mega-cities such as NEOM, valued at up to $500 billion, alongside programs to boost tourism, entertainment, and industry.
In recent years, however, delays and cost overruns have prompted a reassessment. In 2025, the Public Investment Fund ordered spending cuts of at least 20 percent across some portfolios, while the value of major project contracts dropped sharply in the first months of the year.
Several Saudi mega-projects have faced financial and administrative difficulties, including the Trojena winter sports resort. Construction has also completely halted on a massive cube-shaped skyscraper in the capital, Riyadh.
A report by Arabian Gulf Business Insight (AGBI) said some budgets were cut by as much as 60 percent, particularly affecting the five so-called “mega-projects,” led by NEOM and the Red Sea Global tourism project, which aims to develop a destination spanning 1,500 square miles and including 25 new hotels.
Reports have also cited cash-flow problems that delayed payments to contractors, especially in the construction sector. One major international company reportedly sought $800 million in unpaid dues, arguing that delayed payments were a key factor behind scaling back its operations in the kingdom. A large European firm also exited the Saudi market due to financial risks and lack of clarity.
Officials hope the renewed focus on artificial intelligence and technology will attract greater foreign investment. Major firms such as the US-based Blackstone have announced plans to build data centers in the kingdom, while the Public Investment Fund aims to increase investment in non-oil sectors.
Saudi Arabia’s Public Investment Fund is also preparing to launch a new five-year strategy (2026–2030), described by Reuters—citing three informed sources on Monday—as the largest recalibration to date of the economic transformation path tied to Vision 2030.
As the 10th anniversary of Vision 2030 approaches, this ministerial change is widely seen as a step toward a more realistic and sustainable phase. Callen says it “makes sense to bring in new leadership to oversee this next stage of the plan.”
The article is a translation of the original Arabic.
Ghassan Taqi
A journalist specializing in Iraqi affairs, he has worked with the Middle East Broadcasting Networks (MBN) since 2015. He previously spent several years with Radio Free Europe/Radio Liberty, as well as various Iraqi and Arab media outlets.
Ringo Harrison
Ringo Harrison is a content coordinator based in Washington DC. He is a recent graduate from Lund University in Asian Studies. He previously worked at American Purpose.
Sakina Abdallah
A Saudi writer, researcher, and TV presenter
