Saudi CEOs navigate economic uncertainty and AI with optimism
Business leaders in Saudi Arabia are confronting the dual challenges of global economic uncertainty and the rapid advancement of AI, according to a new report.
The ‘KSA CEO Outlook 2025’ report from consultancy Strategic Gears, which surveys 300 CEOs across diverse sectors and company sizes, provides a comprehensive overview of leadership priorities concerning operational discipline, strategic investment, and innovation.
The last several years have brought on a lot of macroeconomic turbulence. From the pandemic to inflation and global conflicts, investor confidence has been wavering and the future remains uncertain. To make matters worse, the trend towards protectionism has been gaining steam on the heels of the tariff announced by the Trump administration.
In the midst of all of this, Saudi Arabia has been continuing steadily on the path of diversifying their economy away from an overreliance on fossil fuels. Part of this shift includes Saudi Vision 2030, which has not only accelerated the rate of sustainability initiatives, but has also helped push rapid modernization and future-proofing of the Kingdom’s economy and society.
The strategic trinity for Saudi CEOs
The report identifies a ‘strategic trinity’ guiding CEO decision-making: Market expansion to unlock new growth, spending discipline and efficient resource management, and digital transformation as a way of enhancing operations.
The emphasis on these priorities varies by sector. Manufacturing and professional services firms prioritize market expansion and technology adoption, while the transportation sector focuses on cost discipline.
Knowledge-intensive sectors are the most likely to prioritize scaling R&D and technology integration. For example, manufacturing and professional services, two sectors that score highly on market expansion in the CEO strategic trinity, lead the pack in R&D and technology integration (around two-thirds of CEOs corroborate this).
Optimism in the C-suite
The report shows a clear gradient when it comes to optimism among CEOs in the Kingdom: There is more optimism closer to home. Fewer than half of surveyed CEOs expressed comfort with the global economic trajectory.
However, this optimism increases by approximately seven percentage points when focusing on the Saudi economy, with nearly one-third of CEOs expressing high confidence in the domestic economic outlook. This confidence peaks at the firm level, suggesting that leaders feel more optimistic about elements under their direct operational control.
The survey results also suggest a notable comparative optimism bias, with CEOs generally more confident about their own firms’ trajectories than their respective sectors over the next year. This divergence is most pronounced in retail and manufacturing, while arts and entertainment CEOs are uniquely more confident in their sector than their individual firms.
AI an opportunity, but there are obstacles
Most Saudi CEOs (approximately six in ten) view AI as an opportunity for commercial growth and scalability rather than a threat. This optimism is stronger in larger firms, with two-thirds of large firms betting on AI’s upside compared to 56% of small firms.
Manufacturing leaders show the most aggressive stance toward AI adoption, demonstrating a strong appetite for new market entry, research and development, and technology integration, coupled with the lowest inclination for financial austerity. They perceive significant untapped export potential in a changing global trade landscape.
The barriers to adopting AI vary depending on the size of the firm. Common hurdles across all firm sizes include cybersecurity and legal concerns. Cost constraints are a specific barrier for smaller firms. For mid-sized firms, resistance to change is a more pervasive hurdle, while larger firms grapple with capability gaps due to their expanding use case portfolios.
The report suggests that AI can propel businesses to “escape velocity,” where growth accelerates and decouples from traditional economic constraints. The speed at which Saudi firms mature through the stages of technology adoption will significantly influence their growth trajectories.
Looking forward
The report underscores the dynamic environment in which Saudi business leaders operate. Their strategic focus on growth, discipline, and innovation, coupled with a nuanced approach to AI adoption, will be critical in achieving the Kingdom’s Vision 2030 objectives for economic diversification and private sector contribution.
“Themes like talent and localization, diversity and inclusion, and environmental, social, and governance (ESG) commitments are salient across boardrooms,” reads the Strategic Gears report.
“However, AI and economic uncertainty have emerged as cross-cutting forces, carrying high strategic stakes for nearly every sector and function. They form the lens through which CEOs are making today most of their consequential decisions and prioritizations over operational continuity, strategic investments, and risk posture.”
