Saudi Arabia’s Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, is facing significant setbacks amid broader economic challenges and regional instability, raising questions about the sustainability of its ambitious development projects and investment strategy. Since its launch of LIV Golf in 2022, which saw more than $5 billion funneled into the new golf tournament to attract top players such as Jon Rahm, indications have emerged that the venture may soon seek bankruptcy protection, with vendors and players reportedly preparing legal actions if a restructuring deal does not materialize.
The setbacks come as the fund grapples with declining revenue from Saudi oil exports amid ongoing tensions in the Middle East. Oil export volumes reached their lowest level in nine years, contributing to a drop in foreign direct investment to $35 billion in 2025, falling short of the $100 billion target set for 2030. PIF’s assets under management shrank by 1.1% last year, to $905 billion, accompanied by an $8 billion writedown linked to large infrastructure developments. These financial pressures have compelled the fund to pause, scale back, or cancel several high-profile projects.
Among the projects affected are the halted construction of a $38 billion luxury ski resort intended for the 2029 Asian Winter Games, the near-abandoned “Line” development featuring a horizontal skyscraper originally planned to extend 105 miles, and the mothballed $4 billion Sindalah resort near Neom following construction difficulties. Meanwhile, Lucid Motors, an electric car manufacturer majority-owned by PIF, has reported consecutive multibillion-dollar losses, prompting the appointment of turnaround consultants. PIF’s earlier costly investments, such as its stake in Softbank, continue to weigh on its portfolio.
Despite these challenges, a subsidiary of PIF, Red Sea Global (RSG), responsible for promoting coastal tourism, has seen moderate success with the completion of 19 resorts. Yet, the sector’s growth is hindered by a strategic focus on attracting ultra-high-net-worth international visitors rather than domestic tourists, with flight data indicating arrivals to Red Sea International Airport remain far below projections for the near future.
Amid these developments, the fund appears to be shifting its approach. In late 2025, PIF convened a summit with some of Saudi Arabia’s wealthiest families to encourage greater private sector participation in key projects aligned with the Vision 2030 economic diversification plan. Observers note the move signals a recognition that PIF can no longer shoulder the financial burden of Saudi Arabia’s transformation independently.
Concurrently, PIF is narrowing its investment scope and restructuring internally, consolidating its portfolio management into six main “ecosystems” from more than 20 sectors, leading to executive turnover and uncertainty, particularly among Western managers amid the government’s push to increase Saudi national employment in the private sector. Several top executives overseeing major projects and portfolio companies have been replaced or stepped down in recent months.
Despite the drawdown in some areas, PIF remains active in select sectors such as gaming, entertainment, and artificial intelligence. It recently announced a $2.5 billion fund to support data center investments through its AI affiliate Humain and committed $10 billion to a bid to acquire Warner Bros. The fund also signed an agreement with France to develop a manga-themed amusement park near Paris.
Critics highlight a disconnect between PIF’s stated intent to focus on domestic priorities and its continued capital allocations abroad, with some describing the strategy as inconsistent given domestic economic pressures. The coming months may be pivotal as Saudi Arabia prepares to host the 10th Future Investment Initiative conference on October 26, an event expected to draw global investors and provide insights into the kingdom’s economic outlook and PIF’s future role amid evolving geopolitical and financial realities.