Decades ago, traveling between two cities meant days on the road, and the telegraph was one of the fastest ways to transmit information. Today, an individual can complete a government transaction, transfer money, or manage an entire store from a phone within minutes.

This change represents more than just technological development; it shows how digitization has become part of the economy itself.

According to the Ministry of Communications and Information Technology, the digital economy contributed around 16% of Saudi Arabia’s gross domestic product in 2025—nearly one-sixth of the economy. The information and communications technology market also reached approximately 199 billion riyals that year.

But how does a digital service on a phone screen become economic value that is counted in GDP?

The Digital Economy Is Bigger Than Technology Companies

When we hear “digital economy,” we may picture software companies or data centers alone.

But the impact of digitization extends across broader sectors.

A store that uses electronic payments and delivery can reach customers outside its area. A company that uses cloud services can operate advanced systems without building its own data center. A government agency that moves its transactions to an online platform reduces the time and effort required to deliver the service.

That is why the digital economy is not limited to selling software; it also includes the value created by technology when it enters commerce, healthcare, finance, transportation, and government services.

Why Does a Digital Service Reduce Economic Costs?

Suppose a government transaction once required a visit to an office, the printing of documents, waiting for an employee, and perhaps time away from work.

When the transaction moves to a digital platform, the service itself does not disappear, but the cost of accessing it falls.

Individuals save time and travel, organizations reduce administrative procedures, and government agencies can serve more beneficiaries more efficiently.

That is why platforms such as Absher, Najiz, Nafath, and Sehhaty have become part of the economic transformation, rather than merely a technological upgrade to public services.

What Lies Behind the App?

Every simple digital service visible to the user relies on more complex infrastructure behind the screen.

Artificial intelligence and cloud computing require servers, processors, networks, power, cooling, cybersecurity, and engineers capable of operating these systems.

That is why Saudi investment in data centers and computing is expanding.

One example is the Hexagon data center project in Riyadh, with a planned capacity of 480 megawatts, alongside Microsoft and AWS preparing to expand their local cloud computing regions during 2026.

Here we can see that the “digital economy” is not entirely intangible; behind every artificial intelligence model are buildings, electricity, equipment, jobs, and capital investment.

Where Does Artificial Intelligence Fit In?

If the first phase of digital transformation focused on moving services from paper to screens, the next phase focuses on making technology itself more capable of production, analysis, and performing tasks.

That is why calling 2026 the “Year of Artificial Intelligence” carries economic significance beyond the slogan; it comes amid the expansion of data centers, Arabic language models, cloud services, and investment in research, development, and skills.

The value here does not come merely from owning an artificial intelligence model, but from using it in a company, hospital, or government agency in a way that reduces costs, increases productivity, or creates a new product.

From Consumption to Technology Production

There is an important difference between an economy that uses technology and one that participates in producing it.

Using technology means purchasing and benefiting from software and services. Producing technology, by contrast, adds data centers, local software, cybersecurity, models, research and development, and companies capable of selling their solutions inside and outside the Kingdom.

That is why people remain an essential part of the equation; digital infrastructure needs researchers, engineers, programmers, cybersecurity specialists, and entrepreneurs who can turn technology into a marketable product.

With the digital economy reaching around 16% of GDP, the next question becomes less about the scale of technology and more about its value:

How many jobs will it create? How much will it increase productivity? And how many products and services can Saudi Arabia produce instead of merely using them?

This is where the digital economy moves from the phone screen to the heart of the real economy.