In the latest confirmation that Jared Kushner's late night meetings with Mohammed bin Salman are bearing fruit, if only for two of the world's biggest corporations, Reuters reports that Apple and Amazon are in discussions with Riyadh on investing in Saudi Arabia as part of Crown Prince Mohammed bin Salman’s push to give the conservative kingdom a high-tech look, which supposedly differs from his push to give the kingdom a "cultured look" by buying up random ultra expensive pieces of art to prove to the world just how much appreciated fine art is in the oil rich kingdom (which occasionally shakes out its richest nobles to fund the government budget deficit).
As Reuters adds, while both companies already sell products in Saudi Arabia via third parties, they and other global tech giants have yet to establish a direct presence. To achieve this, Apple is already in talks with SAGIA, Saudi Arabia’s foreign investment authority.
Meanwhile, Amazon’s discussions are being led by its AWS cloud computing division - Amazon Web Services - which would "introduce stiff competition in a market currently dominated by smaller local providers like STC and Mobily." Said otherwise, Amazon is about to engage in its familiar monopoly roll out in yet another timezone.
The news is welcome for Riyadh which wants to be seen as the technical and investment hub in the region:
Riyadh has been easing regulatory impediments for the past two years, including limits on foreign ownership which had long kept investors away, since falling crude prices highlighted the need to diversify its oil-dependent economy.
As a result, "luring" Apple and Amazon would further MbS's so-called "reform plans" and raise the companies’ profile in a young and relatively affluent market, which already boasts some of the highest internet and smartphone use in the world. According to Reuters, 70% of the Saudi population is under 30 and frequently glued to social media.
In terms of specifics, Reuters reports that a licensing agreement for Apple stores with SAGIA is expected by February, with an initial retail store targeted for 2019, said two sources familiar with the discussions. Amazon’s talks are in earlier stages and no specific date has been set for investment plans.
The new "investment" will only solidify the two companies' presence in the oil rich country:
Apple already holds second place in the Saudi mobile phone market behind Samsung, according to market researcher Euromonitor.
Amazon acquired Dubai-based online retailer Souq.com earlier in 2017, opening access for Amazon retail goods to be sold in the kingdom.
Should the investment plans be executed, none would be happier than Prince Mohammed, who in addition to effectively running the entire kingdom singlehandedly following two recent countercoups, and the brain behind OPEC's production strategy, is an "avowed technophile" and has styled himself a disrupter in the model of Steve Jobs, Mark Zuckerberg and Bill Gates.
During an official visit to the United States last year he met executives at Facebook, Microsoft and Uber, in which the sovereign wealth fund he chairs later took a $3.5 billion stake.
Since then, he has also set up a $45 billion technology investment fund with Japan’s SoftBank and announced plans to create a futuristic $500 billion mega-city with more robots than humans.
Needless to say, few companies would be as prominent a catch as Apple and Amazon:
Apple and Amazon have both been on a Saudi priority list of foreign firms which officials hope to attract to further their reforms, one of the sources said.
“Many tech multinationals now in Saudi Arabia are either vendors to the Saudi government or, in the case of Uber, have benefited from a sizable Saudi investment,” said Sam Blatteis, who heads Dubai-based tech advisory MENA Catalysts Inc.
“Amazon entering the Saudi market would be a step-change.”
As Reuters concludes, for Amazon, the move underscores how AWS is looking to take an early lead in selling data storage and computing services to customers in the Middle East. It comes as the company is competing aggressively with Microsoft, which is the world's second biggest provider of cloud computing services by revenue, however which now offers cloud services in twice as many regions.