Saudi Arabia’s public-sector spending on communications and information technology services reached approximately $8.51 billion (SAR 31.90 billion) in 2025, according to a new government spending report issued by Saudi Arabia’s Digital Government Authority.
The report offers a detailed look at how government entities are allocating capital to digital services, cloud systems, emerging technologies, procurement frameworks and local technology suppliers. It comes as Saudi Arabia continues to position digital government as a central part of its Vision 2030 modernization agenda.
Government contracts in the sector accounted for about $8.45 billion (SAR 31.70 billion) across more than 6,145 contracts, the authority said. The figures point to sustained public investment in digital infrastructure after years of national programs aimed at improving online government services, integrating public-sector platforms and making state procurement more efficient.
Cloud and AI Spending Increase
The Digital Government Authority said spending on cloud computing rose 42 percent compared with 2024, reflecting broader adoption of scalable infrastructure across government entities. Spending on artificial intelligence and emerging technologies increased 20 percent, underscoring the government’s push to bring new digital tools into public administration.
That rise is significant because digital transformation in Saudi Arabia is moving beyond basic service digitization. The latest spending figures suggest government agencies are now putting more money into the systems that sit behind digital services, including cloud migration, data capabilities, automation and advanced technology procurement.
The authority framed the report as evidence of continued support for digital transformation programs and investment in technology enablers. Saudi Arabia’s official digital government strategy has emphasized more integrated, proactive and efficient services, with the Digital Government Authority serving as the national reference point for regulating and developing digital government work.
Economic Impact and Job Creation
The report also highlighted the broader economic impact of government ICT spending. According to the authority, the spending generated more than $2.53 billion (SAR 9.5 billion) in direct economic impact and about $933 million (SAR 3.5 billion) in indirect impact.
More than 7,000 jobs were created through the spending, while local content in government software purchases reached 49 percent. That local-content figure is important in the Saudi context, where procurement policy is increasingly tied to domestic capability building, private-sector participation and technology localization.
The report indicates that digital government spending is not being treated only as an administrative cost. Instead, it is being used as an economic lever to support employment, local suppliers and technology-sector development.
Small Businesses Gain a Larger Role
Small and medium-sized enterprises also played a notable role in the 2025 spending picture. SMEs accounted for 23 percent of sector spending, while contracts awarded to SMEs reached about $2.46 billion (SAR 9.23 billion), representing 29 percent of total government contracts in the sector.
That share suggests smaller technology companies are gaining more access to public-sector digital procurement. In a market where government demand can shape supplier development, SME participation may help diversify the technology vendor base and reduce reliance on a narrow group of large contractors.
The report did not name individual suppliers, but the scale of SME contract awards shows that public-sector digital transformation is becoming a channel for broader private-sector participation.
Framework Deals Help Speed Up Public-Sector Buying
The report also pointed to the role of national framework agreements, a procurement mechanism designed to simplify purchasing and standardize access to technology services. Purchase orders through these agreements exceeded approximately $1.38 billion (SAR 5.16 billion), benefiting more than 500 government entities and 65 companies.
Framework agreements can help government buyers move faster by reducing repetitive procurement processes and creating pre-arranged terms with approved suppliers. In technology spending, where agencies often need similar services such as cloud, software, cybersecurity or digital platforms, these agreements can also support cost control and operational consistency.
The Digital Government Authority said the model contributed to financial and operational savings, while helping accelerate procurement procedures across government entities.
Vision 2030 Context
Saudi Arabia has made digital government one of the visible pillars of its state modernization program. Vision 2030 calls for a more effective, accountable and efficient government, while the Kingdom’s digital government strategy focuses on transforming services through digitization and improving integration across public entities.
The 2025 spending report gives a financial snapshot of that strategy in practice. Rather than measuring digital progress only by the number of online services, the report focuses on spending patterns, contract volumes, economic impact, SME participation and procurement efficiency.
The emphasis on cloud computing, AI and emerging technologies also signals where the next phase of investment may be headed. As government entities expand digital service delivery, the demand for secure infrastructure, data systems and interoperable platforms is likely to keep growing.
