DAVOS: Saudi Arabia’s Minister of Investment Khalid Al-Falih told the World Economic Forum that the global artificial intelligence “race is on,” with the Kingdom determined to preserve strategic flexibility while leveraging its diplomatic reach.
Speaking on the “AI Power Play, No Referees” panel, Al-Falih described AI as “the transformation of this century,” while warning it will soon be commoditized rather than monopolized by any single country or company. He stressed that AI’s true power lies in accessibility, arguing that diffusion must extend beyond competing economies to a truly global scale.
While acknowledging the United States’ current lead, Al-Falih said uncertainty about future dominance makes optionality essential. “We don’t know who’s going to be ahead four or five years from now,” he said, adding that Saudi Arabia reserves the right to maintain flexibility amid shifting global dynamics.
Saudi Arabia has emerged as a major AI player, supported by large-scale investments and a prominent presence at Davos. Al-Falih highlighted the Kingdom’s energy advantage, noting that low-cost power and renewables position it uniquely to host AI data centers as part of its diversification strategy.
“We’re investing across the technology stack, in applications and LLMs and in connectivity,” he said. “This is a global good. Just as important as building the data hub that Saudi Arabia is building, we need to be connected to Europe and Asia so that data and AI power can move across borders and economies.”
Although strategically aligned with the US, Saudi Arabia has also backed Chinese, Korean and Japanese companies to retain flexibility. “Optionality is very important. We are the owners of our own destiny, and we will not let go of that,” Al-Falih said.
On Tuesday, the WEF announced the first phase of a Digital Embassy Framework, aimed at bringing clarity and consistency to how trusted “data embassies” are designed and governed worldwide. The initiative addresses cross-border sovereign AI infrastructure and data hosting, focusing on trust, security and governance. It is expected to be formally launched in Jeddah in April.
The framework was introduced during a panel titled “Digital Embassies for Sovereign AI,” featuring Malaysia’s digital minister Gobind Singh Deo and Switzerland’s foreign affairs state secretary Alexandre Fasel. Fasel said the framework would prevent countries from renegotiating from scratch by offering shared principles across technical, legal and governance domains.
Both speakers noted that “digital embassy” can be a misnomer, emphasizing function over form: enabling data and compute resources to be hosted abroad while preserving sovereignty, access and control.
Deo said the concept reflects practical realities, as some nations lack the energy and water needed for large-scale data centers. Hosting infrastructure in better-resourced countries can offer a solution, provided safeguards ensure security and sovereign control.
Saudi Arabia moved early on this front, publishing a draft Global AI Hub Law in April 2025, described as the first G20 attempt to codify a legal framework embracing the digital embassy model.
Al-Falih said Saudi policy work on data sovereignty began long before the recent AI acceleration, balancing privacy with open access to data to support research, drug discovery and productivity.
In a separate panel, Anthropic CEO Dario Amodei warned that AI’s power will arrive quickly, bringing transformative benefits alongside serious risks. He said progress must be matched with guardrails, emphasizing collaboration between companies and governments.
At another session, UAE Minister of State Maryam Al-Hammadi highlighted regulatory agility, noting that the UAE has amended 90 percent of its laws in four years. She said AI can advise in drafting legislation, but humans must remain in command, guided by principles of accountability, transparency and privacy.
Other panelists cautioned against overregulation. Argentina’s Federico Sturzenegger warned that fear-driven policymaking can stifle innovation, while Meta’s Joel Kaplan said excessive focus on risks has already weakened competitiveness in parts of Europe.
