The lines between tech infrastructure and military targets are blurring

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WHAT WE’RE TRACKING TODAY

A lackluster war update from Trump

Good morning, folks. The US is “very close” to ending the war on Iran — that’s the main takeaway from US President Donald Trump’s address early this morning. While we were expecting some grand announcement — a ceasefire agreement or a ground invasion — the speech didn’t provide any of that.

Here’s what you need to know: Trump shifted his tone regarding the re-opening of the Strait of Hormuz, downplaying Washington’s role. Instead, he said, the operation should be led by countries that — unlike the US — rely heavily on the strait for oil imports, adding that the waterway will “open up naturally” after the war ends. This runs counter to Trump’s call on NATO allies to help Washington revive traffic in the waterway last month.

Trump also reiterated his timeline of continuing strikes on Iran for the next two to three weeks, threatening to target its energy infrastructure if “there’s no deal.” He also thanked US allies in the region — including Saudi Arabia and the UAE — and vowed that Washington would “not let them get hurt.”

Market reax: Oil and equities tumbled following the speech, which investors hoped would bring news of a de-escalation. Following the speech, Brent crude futures rose 5% to USD 106.42, and Asian markets opened in the red, with Japan’s Nikkei and South Korea’s Kospi looking at steep losses. Wall Street is also looking at a volatile day of trading, with futures down.

WEATHER- Trickling on: Light to moderate thunderstorms are still hanging over most of the Kingdom, so pack your umbrellas.

Riyadh: 29°C high / 16°C low;
Jeddah: 38°C high / 25°C low;
Makkah: 40°C high / 27°C low;
Dammam: 28°C high / 16°C low.

Watch this space

GDP WATCH — The GCC is likely to slip into a war-induced recession this year, with GDP now projected to contract by 0.2%, according to a recent research note from Oxford Economics. The forecast represents a massive 4.6 percentage point downgrade from pre-war estimates as the Iran war enters its second month and reshapes the region's economic outlook.

Saudi Arabia is seeing a much shallower downgrade than its neighbors, the note explains. The differentiator here is geography, as the Kingdom’s ability to bypass the Strait of Hormuz allows it to maintain strong export levels while the rest of the bloc is choked by logistical blockades. Also, the Kingdom’s public finance could see some positive gains as they are able to export oil at higher prices.

The Kingdom, Qatar, and Jordan are calling for a joint Arab action to address the economic fallout from the war, The National reported. The announcement came after a high-level summit in Jeddah, where leaders from each of the three nations discussed the war’s impact on energy, trade, and regional stability.

ENERGY — Aramco raised April’s liquefied petroleum gas (LPG) official selling prices sharply — with propane up by USD 205 to USD 750 per ton and butane up by USD 260 to USD 800 per ton, Reuters reports, citing traders.

Is this about demand? Or is supply getting hit hard? Aramco’s Juaymah terminal outage last month cut shipments to Asia in March, right when the market needed them, while a third of global seaborne LPG supply was cut off due to Hormuz constraints and damaged capacity.

IPO — Facilities Management Company is on track to make its Tadawul debut after the Capital Market Authority greenlit its IPO. The facility management provider will list 30% of its share capital — represented by 42 mn shares. We’ll be watching the company’s prospectus for more details on the offering.

Data point

The unemployment rate for citizens fell to 7.2% in 4Q 2025, a 0.3 percentage point drop from 3Q, according to figures from Gastat. The unemployment rate for the total population (Saudis and non-Saudis) edged up slightly to 3.5%, representing a 0.1 percentage point increase over 3Q 2025, but remained stable y-o-y.

Female participation is the engine: The bright spot in the data is the Saudi female unemployment rate, which dropped by 1.8 percentage points to 10.3%, its lowest level on record. Their labor force participation rate also reached 34.5%, up 0.8 percentage points from the previous quarter. The employment-to-population ratio of Saudi women went up by 1.3 percentage points to 31.0%.

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The big story abroad

Apart from Trump’s address (which we dive into in the news well, above), space is a big theme on the front pages this morning. Elon Musk’s SpaceX has confidentially filed for an IPO, which could value the firm at above USD 1.75 tn, sources close to the matter told Bloomberg. A confidential filing allows the satellite and AI company to seek feedback from the Securities and Exchange Commission and make changes before any information goes public.

To infinity and beyond: NASA’s first crewed mission to the moon in more than 50 years took off yesterday. The Artemis II launched from Florida and will take four astronauts around the side of the moon — the furthest humans have ever traveled from Earth. The move signals that Washington aims to cement its leadership in space exploration amid tough competition from China.

Iran threats blur the line between tech infrastructure and military targets

The US-Iran conflict is erasing the line between commercial technology infrastructure and military targets in the Middle East. Iran’s Islamic Revolutionary Guard Corps (IRGC) said it will begin launching attacks against the regional operations of 18 major technology and defense companies as of yesterday evening.

The IRGC target list reads like a roster of the companies driving the GCC’s tech ambitions — Apple, Google, Microsoft, Meta, Nvidia, Amazon, IBM, Intel, Oracle, HP, Palantir, Dell, Cisco, JPMorgan Chase, GE, Tesla, and Boeing. Non-US firms on the list include the UAE’s AI champion G42 and Dubai-based tech security service provider Spire Solutions. The IRGC advised the employees of these companies to evacuate their workplaces immediately and ordered civilians to clear a 1-km radius around any associated facilities across the region.

Why? Tehran claims these corporations are actively enabling US and Israeli military targeting operations, pointing to defense contracts and data processing capabilities as justification for the strikes.

Why it matters

The risk profile of the AI boom is changing overnight. The massive digital footprint the GCC has spent the last few years building — the server farms, cloud regions, and data centers meant to transition the region away from oil — is now being treated as active national security infrastructure by a hostile state actor.

ICYMI- This reality was tested in early March when Iranian drones successfully struck Amazon Web Services (AWS) cloud computing facilities in the UAE and Bahrain. Those strikes triggered digital outages that crashed banking sites, payment processors, and consumer services across the region.

Hardware intended to process civilian and commercial data is now inextricably linked to military applications — at least that’s how the IRGC sees it. Palantir, for instance, maintains a corporate office in Abu Dhabi. It also builds the data architecture for Project Maven, a Pentagon AI program that processes drone and satellite imagery to identify targets for air strikes. There is no distinction between the two in the eyes of Tehran.

“We can’t think about this AI infrastructure as purely a commercial asset anymore, and to some extent, it’s national security infrastructure,” Hamza Chaudhry, lead of AI and national security at the Future of Life Institute, told Politico.

James Henderson, CEO of risk management firm Healix, echoed this shift, noting that the threat environment for commercial tech is not a flash in the pan. “Tech assets are now treated as part of the conflict, not peripheral to it. It also signals that future crises may target data centers and cloud platforms as much as traditional strategic sites,” Henderson told CNBC.

The threat covers a big footprint

The targeted assets include massive, physical facilities requiring immense power and cooling, heavily concentrated in specific economic zones. The footprint of these 18 companies is anchored in Saudi Arabia and the UAE, who are fiercely competing to become the global hub for compute power, with critical supply chain and connectivity nodes spilling over into Bahrain and Kuwait.

The infrastructure footprint is immense and expanding rapidly here at home. The recent USD 600 bn joint economic partnership with the US is driving Google, Oracle, and Microsoft to pour tens of USD bns into the Kingdom:

Google committed USD 10 bn to construct a sprawling AI hub in Dammam in partnership with Humain, designed to deploy advanced computational power across the region;
Oracle is executing a USD 14 bn expansion of its cloud and AI infrastructure in our neck of the woods;
Nvidia already started routing thousands of its advanced BG300 Grace Blackwell supercomputing chips into the Kingdom to serve as the bedrock for training local AI models.

All of this physical hardware — housed in massive warehouses in Dammam, Riyadh, and the northwest desert — is now operating under the shadow of a direct military threat.

Tech is also at the heart of the shift in gigaprojects. Neom is pivoting away from its original residential ambitions to focus on building massive, high-density AI data centers. The PIF is also relying heavily on Tech and AI as one of the core pillars of its five-year investment strategy, to be unveiled in the next few weeks.

The UAE is in a similar pickle. Abu Dhabi aggressively positioned itself as a sovereign AI powerhouse, largely through G42, which secured a USD 1.5 bn investment from Microsoft, bringing the tech giant’s total planned investment in the UAE to over USD 15 bn by the end of the decade.

This capital is funding real, physical targets. G42’s subsidiary, Khazna Data Centers, is currently executing a 200 MW expansion of local capacity. Abu Dhabi is also developing Stargate UAE, a 5 GW AI infrastructure campus backed by Microsoft, OpenAI, and Oracle. Dubai and Abu Dhabi also host regional HQs for nearly every company on the IRGC’s list, putting thousands of highly skilled tech workers directly in the evacuation zones.

What’s next?

Tech firms will be scrambling to secure their personnel and harden their regional assets. Intel publicly confirmed it is taking active steps to safeguard its workers and facilities in the Middle East, without providing details. Some global companies already instructed their GCC-based employees to work remotely and severely limit travel.

The broader macro environment suggests this disruption will not be brief. The conflict has already choked off traditional trade routes, with Iran effectively shutting down traffic through the Strait of Hormuz and sending Brent crude prices above USD 100 / bbl. The EU is already warning of prolonged turmoil in energy supplies, specifically jet fuel and diesel, because regional energy infrastructure is heavily damaged.

The digital economy now faces the same physical vulnerability as the oil economy. If a resolution for the conflict is not reached soon and Iranian drone strikes start targeting tech assets, hundreds of bns of USD earmarked for the GCC's AI transformation could stall.

TASI’s March rise could be masking weak investor appetite

TadawuI’s main market defied regional war jitters in March, as the energy-heavy bourse turned into a geopolitical hedge. Still, smaller stocks and the Nomu parallel market exhibited weaker performance than heavyweights, suggesting investor caution is still high.

TASI closed March up 5.05% at 11.2k points as the Iran war propped up oil prices. Market cap stood at SAR 9.86 tn by the end of the month, anchored by the sheer weight of Aramco (+15%), according to market data. Total trading value hit SAR 103.9 bn across roughly 4.8 bn shares, with flows largely concentrated in blue chips as investors piled into defensive names.

The recovery looks more like a stability-led bounce than a full return of risk appetite, with state-linked institutions stepping in as geopolitical tensions picked up, Christy Achkar, financial market analyst at CFI Financial Group, tells EnterpriseAM. Large local players, including government-related and pension funds, likely supported key blue chips to keep the market anchored, she said.

What gives it away? Weaker performance in smaller stocks and growth markets like Nomu suggests that investors are still cautious and risk appetite has not fully returned, Achkar added. “This type of buying can push the index higher because TASI is heavily weighted toward large banks and energy firms,” he noted, suggesting the rally was a calculated effort to stabilize the market rather than a shift in organic investor behavior.

REFRESHER- The rebound comes after a weak 2025, when the index fell 12.8% — its sharpest drop in a decade — amid softer oil prices and delays across large-scale projects. Heading into 2026, global investors largely stayed on the sidelines, citing limited near-term catalysts, but March’s move suggests positioning is shifting back toward energy and banking heavyweights.

The sector breakdown

Gains were concentrated in materials, petrochemicals, and financials, led by Saleh Alrashed (+52.4%), Petro Rabigh (+44.6%), and Al Rajhi Takaful (+41.9%), with Yansab (+41.6%) and Chemanol (+35.2%) also among the top performers.

Travel-linked and consumer-facing names were hit hardest. Losses were led by Elm (-16.4%), Saico (-16.2%), and AlKhaleej Training (-15.8%), followed by flynas (-14.7%) and Seera (-14.1%), reflecting weaker sentiment toward sectors exposed to discretionary demand and cross-border activity.

TASI stands on its own against regional peers

Most regional markets lagged TASI in March. Egypt’s EGX30 fell 7.9% during the month as foreign investors stepped up selling amid rising regional tensions, while Abu Dhabi’s ADX (-8.9%) and Dubai’s DFM (-16.4%) bore the brunt of the region’s geopolitical unrest, as Dubai’s two growth engines — tourism and real estate — took a hit.

ICYMI- Global strategists are also leaning our way: Morgan Stanley upgraded its outlook for Saudi equities to “overweight” from “equal weight” earlier this month, citing the Kingdom’s positive exposure to higher oil prices, relatively light positioning by global funds, and the stability of the SAR’s peg to the USD. Meanwhile, both the UAE and Egypt were downgraded to “equal weight.”

The parallel market was not so lucky

The NomuC fell 0.92% to 22.7k points in March, confirming the cautious stance of the broader market.

Why? Investors tend to “prioritize stability and liquidity over growth” in uncertain times, Achkar said, adding that money is flowing into TASI’s cashflow-heavy firms while risk appetite for smaller growth stories remains muted because they don’t benefit directly from higher oil prices.

Mawani doubles down under pressure

Mawani has kicked off operations at the Jubail commercial port container terminal under a privatization agreement with Saudi Global Ports (SGP) backed by more than SAR 2 bn in private investment, according to a press release.

BACKGROUND- Back in June, SGP — a JV between the PIF and Singapore’s PSA International — pledged some SAR 700 mn to revamp and operate multipurpose terminals in Eastern ports, including Jubail Commercial Port, King Abdulaziz Port in Dammam, King Fahd Industrial Port, and Ras Al Khair Port, after being awarded BOT contracts by Mawani.

The upgrades: Berth length was extended from 1k meters to 1.4k meters; depth increased from 14 meters to 18 meters to bring in larger vessels; STS cranes increased from 6 to 10; RTGs went up from 13 to 29, while annual capacity rose from 1.5 mn TEUs to 2.4 mn across a 460k sqm footprint.

Jubail was pulled into the conflict’s risk perimeter, with cargo flows diverted, nearby waters exposed to attacks, and the broader Gulf system effectively frozen.

Why it matters

Against this backdrop, pushing ahead with the terminal reads as a deliberate choice to stay the course on a pre-war expansion play rather than pause or reprice risk, positioning the port to capture flows if routing stabilizes.

Can capacity solve a geopolitical problem? A port is built to control variables — turnaround times, capacity, and expanding freezones. But conflict introduces an uncontrollable variable — access. The GCC’s operational efficiency is now being tested on whether this efficiency matters when the route itself is unstable.

Sadara Chemical’s losses widen in 2025

Sadara Chemical Company’s net losses widened to SAR 5.8 bn in 2025, from SAR 4.2 bn the year prior, its subsidiary Sadara Basic Services said in a Tadawul disclosure. Revenue also slipped 14.8% y-o-y to SAR 9.9 bn over the same period. The downturn was attributed to lower sales volumes, margin compression, and higher fixed costs from unplanned disruptions and extended maintenance that constrained production, alongside weaker selling prices.

Accumulated losses climbed to SAR 44.2 bn in 2025, reaching 124% of capital, up from SAR 38.4 bn in 2024. Despite this, the company expects to maintain enough liquidity for the upcoming year, receiving shareholder approval to continue operations.

2026 is off to a rough start: The company has already had to halt production at its Jubail complex this week as the Iran conflict continues to strangle regional supply chains. With no clear timeline for a restart, management warned the shutdown will weigh on this year’s financial performance

Advanced Global to swap Korean stake for Saudi plant

Advanced Global agrees to swap South Korea stake for Saudi assets

Advanced Petrochemical Company’s Advanced Global Investment will carry out a share swap with SK Gas Petrochemical, according to a Tadawul disclosure. The agreement involves Advanced Global swapping its 30% stake in South Korea’s SK Advanced for SK Gas Petrochemical’s 15% stake in Saudi’s Advanced Polyolefins Industry Company. Advanced Global will also pay USD 129.3 mn to SK Gas Petrochemical to account for the valuation gap between the two holdings.

The transaction involves a cross-border asset ownership shuffle, where Advanced Global will shed its interest in SK Advanced’s 600k tpa propane dehydrogenation (PDH) plant and a 400k tpa polypropylene plant in Ulsan. In exchange, the company is increasing its grip on Advanced Polyolefins’ Jubail complex, which has capacities of 843k tpa propylene and 800k tpa polypropylene.

Why this matters: By offloading its interest in the Korean plant, Advanced Petrochemical is doubling down on its home turf operations, choosing to focus on its Jubail complex, which boasts higher capacities.

How the war is rewiring MENA VC -Magnitt

The MENA venture capital (VC) landscape is entering a period of adjustment as geopolitical volatility begins to reshape investor behavior. One month into the ongoing regional conflict and shifting macro conditions, a Magnitt report seen by EnterpriseAM indicates that while headline funding has yet to reflect recent volatility, underlying capital dynamics are starting to shift — with knock-on effects likely to surface in the months ahead.

This adjustment is driven by macro movements. Volatile oil prices (which briefly crested USD 100 per barrel) and inflation raise capital costs, while shifting interest rate expectations tighten global liquidity and heightened risk perception slows international deployment. Disruptions also stem from travel constraints that hinder in-person closings and fiscal shifts that increase sovereign selectivity.

The cascading effect

Reliance on international capital is the primary vulnerability. Foreign investors accounted for 49% of total MENA funding in 2025 and are historically the first to withdraw during shocks. This exposure is most acute in the UAE, where international participation reached 78%, compared to 29% in Saudi Arabia.

This is most pronounced during the growth stage, when international investors provided 69% of Series A and 51% of Series B+ funding in 2025, leaving larger rounds more exposed to changes in deployment pace.

Earlier stages also face risks as uncertainty causes investors to concentrate capital on existing portfolios. With only 7.3% of MENA startups historically advancing from early-stage to Series A, tightened conditions could weaken the long-term pipeline of high-growth companies within 6-18 months.

Exits could also see delays: Because nearly a quarter of MENA’s venture exits involve international buyers, the region may face a liquidity bottleneck as global risk appetite cools. As IPO windows are pushed back and M&A timelines lengthen, the resulting delay in capital recycling threatens to create a “self-reinforcing venture slowdown,” where weaker liquidity today dries up the capital available for the next generation of startups.

What about ol’ reliable? While government-backed sovereign investors continue to provide an important layer of stability, evolving fiscal conditions — which have caused downward revisions of many MENA states’ 2026 GDP forecasts — may lead to more selective strategies. Future allocations will likely prioritize sectors aligned with national mandates, such as AI and fintech infrastructure.

TASI	11,276	+0.2% (YTD: +7.5%)
MSCI Tadawul 30	1,517	+0.2% (YTD: +9.4%)
NomuC	22,548	-0.7% (YTD: -3.2%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	46,731	+3.1% (YTD: +11.7%)
ADX	9,650	+1.4% (YTD: -3.4%)
DFM	5,545	+2.0% (YTD: -8.3%)
S&P 500	6,575	+0.7% (YTD: -4.0%)
FTSE 100	10,365	+1.9% (YTD: +4.4%)
Euro Stoxx 50	5,733	+2.9% (YTD: -1.0%)
Brent crude	USD 106.16	+4.9%
Natural gas (Nymex)	USD 2.82	0.0%
Gold	USD 4,818	+0.1%
BTC	USD 68,113	-0.2% (YTD: -22.3%)
Sukuk/bond market index	914.60	+0.1% (YTD: -0.5%)
S&P MENA Bond & Sukuk	148.96	0.0% (YTD: -1.9%)
VIX (Volatility Index)	24.54	-2.8% (YTD: +64.1%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.2% yesterday on turnover of SAR 6.6 bn. The index is up 7.5% YTD.

In the green: MESC (+10.0%), Emaar EC (+10.0%), and Saptco (+9.9%).

In the red: Saudi Cable (-8.0%), Senaat (-6.7%), and Kingdom (-4.8%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.7% yesterday on turnover of SAR 28.9 mn. The index is down 3.2% YTD.

In the green: Almodawat (+18.3%), Alqemam (+11.9%), and NGDC (+9.3%).

In the red: Time (-30.0%), Albattal Factory (-20.5%), and Leaf (-10.7%).

CORPORATE ACTIONS-

Tabuk Agricultural Development Company’s board proposed a 77.4% capital cut to write off SAR 303.3 mn in accumulated losses, reducing capital to SAR 88.5 mn from SAR 391.8 mn, it said in a disclosure to Tadawul. The move will be executed by canceling 0.7741 shares per share held and remains subject to regulatory and shareholder approval. A previous proposal in December 2025 was rejected.

CALENDAR

APRIL

20-22 April (Monday-Wednesday): Sports Investment Forum (SIF), Riyadh.

20-22 April (Monday-Wednesday): Future Aviation Forum, Riyadh.

MAY

3-9 May (Sunday-Sunday): The Global Sustainability Expo, The Arena Riyadh Venue.

19-21 May (Tuesday-Thursday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

24-28 May (Sunday-Thursday): Eid Al Adha holiday.

JUNE

15-17 June (Monday-Wednesday): Aluminum Arabia, The Arena, Riyadh.

21-24 June (Sunday-Wednesday): Saudi Food Exhibition and Conference, Riyadh Front Expo.

21-24 June (Sunday-Wednesday): Saudi Print & Pack, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Riyadh International Industry Week, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Saudi Plastics & Petrochem, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Saudi Smart Logistics, Riyadh International Convention & Exhibition Center.

22-24 June (Monday-Wednesday): The Future Hospitality Summit, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

JULY

6 July-23 August (Monday-Sunday): Esports World Cup, Riyadh.

AUGUST

31 August-3 Sep (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center - Malham.

SEPTEMBER

9-10 September (Wednesday-Thursday): Procurement and Supply Chain Futures Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

9-10 September (Wednesday-Thursday): Real Estate Supply Chain Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

15-17 September (Tuesday-Thursday) The Global AI Summit, King Abdulaziz International Convention Center, Riyadh.

23 September (Wednesday): Saudi National Day.

OCTOBER

12-15 October (Monday-Thursday): World Energy Congress, Riyadh.

26-28 October (Monday-Wednesday): ACHEMA Middle East, Riyadh International Convention & Exhibition Center.

NOVEMBER

24-28 November (Tuesday-Saturday): Aero Middle East and Sand & Fun, Thumamah Airport, Riyadh.

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production;
September: Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center;
November: The UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia;
November: The Esports Nations Cup, Riyadh;
The World Economic Forum’s Global Collaboration and Growth Meeting, Jeddah;
SkyMove Air Cargo MENA, Riyadh;
The Intervision international music competition will take place in Saudi Arabia.

Signposted to happen sometime in 2027:

The World Water Forum takes place in Riyadh;
The Ocean Race finishes in Amaala on the Red Sea;
Riyadh-Kudmi transmission line to be completed;
Capital Markets Forum takes place in March in Riyadh.

Signposted to happen sometime in 2Q 2027:

The Hail Region Water Networks Project is expected to be completed.

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