Saudi Arabia’s Public Investment Fund (PIF) is facing a shortage of cash for new investments as some projects run into financial difficulties, foreign media reported. Saudi Arabia's Public Investment Fund (PIF) has made significant investments in recent years and is central to Crown Prince Mohammed bin Salman's goal of reducing the Saudi economy's reliance on oil revenue.
This includes numerous investments in the video game industry, including stakes in game publishers such as Take-Two and Nintendo, as well as its recent $55 billion acquisition of Electronic Arts (EA).
However, the New York Times reported that according to 11 people familiar with the operations of the Saudi Public Investment Fund (PIF), the PIF may temporarily stop injecting capital due to the financial difficulties of multiple projects.
These projects include Neom, a vast area and ski resort that employs robot workers, a coffee chain that currently has only one store, a cruise line that owns a ship, and an electric car startup that has yet to deliver a car.
The Kingdom of Saudi Arabia is still rich in oil resources. However, its ability to extract is severely constrained by geopolitical agreements that limit oil supplies and overall low crude oil prices. The government is facing a growing budget deficit and borrowing money to meet Prince Mohammed's domestic commitments.
The Saudi Public Investment Fund (PIF) is actively restructuring its operations, and the prince has fired the head of at least one of its projects, Neom, according to sources in the New York Times. It is reported that the fund is also formulating plans to increase investment in traditional investment areas such as listed stocks.
The largest recent investment by the Saudi Public Investment Fund (PIF) is its bid for Electronic Arts, the publisher of the "FIFA" and "Battlefield" series of games. Representatives of PIF stated that this is a long-term investment that will eventually double in value.