The crown prince’s Washington visit was a personal success, as Riyadh also secured access to high-quality US technology
Crown Prince Mohammed bin Salman Al Saud, Saudi Arabia’s de facto ruler, concluded a highly successful visit to Washington on November 20.
The United States and Saudi Arabia signed agreements on defence, nuclear energy, critical minerals and investment. The crown prince also promised that Riyadh would increase its US investments from a previously announced USD600bn to nearly USD1tn. Deals worth USD270bn were announced at an investment conference.
What’s next
Saudi investment in the United States will increase in certain areas, notably military procurement, artificial intelligence (AI) and liquefied natural gas (LNG). However, Saudi portfolio investment in the United States is falling, and the government is trimming its capital expenditure amid rising levels of public debt. Agreements signed took the form of memorandums of understanding or framework accords, suggesting that details remain pending and raising questions of whether they would all materialise.
Subsidiary Impacts
- For business, US technology and defence companies will have competitive advantages in Saudi Arabia over European and other counterparts.
- There was no public reference to oil policy, which could become a bone of contention in the future.
- Riyadh may leverage its privileged ties to the White House to maintain Trump’s interest in following up on the Gaza truce.
Analysis
The joint press conference between the crown prince and Trump left little doubt over the close personal connection between the two leaders, while the broad range of the agreements announced showed the depth of the strategic relationship between the United States and Saudi Arabia (see SAUDI ARABIA: Riyadh will privilege US ties – November 19, 2025).
Trump brushed aside questions on the 2018 assassination of Jamal Khashoggi, a prominent critic of the Saudi government, and on the extensive business interests of his family and other associates in Saudi Arabia.
On Israel, the crown prince deftly argued that Saudi Arabia supported the principle of forging constructive relations with all countries in the region, but that it would not join the Abraham Accords between the Arab states and Israel until concrete progress is made towards Palestinian statehood (see SAUDI ARABIA/ISRAEL: The puzzle just got harder – October 11, 2023).
Washington and Riyadh signed a strategic defence agreement, which will entail “burden-sharing” funds from Saudi Arabia in order to defray US costs.
De-linking Israel from US ties
A significant achievement for the crown prince was to remove the linkage between securing advanced military technology and normalising relations with Israel.
The United States agreed to sell 48 F-35 fighter jets to Saudi Arabia, although it is not yet clear whether they will include the full technological package available on the F-35 models bought by Israel. Trump had previously offered to sell F-35 jets to the United Arab Emirates (UAE) during his first term, after the Abraham Accords. Abu Dhabi decided against proceeding with the deal during the Biden administration, having determined that the conditions entailed guaranteeing the qualitative superiority of the Israeli fleet of these aircraft.
Israel has expressed concerns about the prospect of Saudi Arabia receiving F-35s. However, the Saudi deal would take an estimated seven years to complete, and even if Riyadh were to receive the full package (as Trump pledged), with no operational restrictions, Israel would maintain its edge through combat experience and its own technical upgrades.
Despite the F-35 deal, Israel will retain its military edge
Trump tried to put a positive gloss on the prospects of Saudi Arabia joining the Abraham Accords. He said that he was in favour, but that Saudi Arabia wanted to be sure that there was a secure path to a two-state solution for the Palestinians. This is unlikely to happen, given the precarious state of the Gaza ceasefire and stabilisation plan.
Putting the United States first
The White House presented the meeting with the crown prince as an affirmation of the primacy of the United States in Saudi Arabia’s strategic thinking (see SAUDI ARABIA: Ties with the United States are in flux – April 20, 2022 and see GULF STATES: US security ties will hold despite lapses – November 3, 2025 and see GULF STATES/UNITED STATES: Defence ties will improve – February 17, 2023).
This entails Riyadh:
- giving US partners priority in the development of nuclear power in Saudi Arabia;
- guaranteeing that there would be no leakage of US AI technology to China (see GULF STATES: Region favours US over Chinese AI links – September 10, 2025); and
- working with Washington to diversify the sourcing of critical minerals away from China.
Riyadh will not forgo its ties with Beijing
This does not mean that Saudi Arabia is downgrading or abrogating ties with China — Beijing remains Riyadh’s largest market for oil and petrochemicals (see GULF STATES: Chinese investment will rise – July 24, 2024). Chinese companies are additionally heavily involved in investments in Saudi Arabia, with a recent focus on renewable energy and the development of electric vehicles.
Investment ties
At a conference in Washington, further details emerged of the type of investments that Saudi Arabia aims to make in the United States, in fulfilment of the USD1tn pledge that the crown prince made to Trump. Sectorally, AI was prominent, along with energy, infrastructure, aviation, healthcare and finance. In his address to the conference, Trump said that the deals there amounted to USD270bn in total, although they were mainly statements of intent rather than firm contracts.
Saudi Arabia’s Public Investment Fund (PIF) has scaled back its foreign activities and is prioritising domestic projects (see SAUDI ARABIA: PIF will boost its domestic activities – October 23, 2025). Its stakes in US-listed equities have fallen, although it still has a substantial portfolio.
It recently made headlines with a USD55bn deal to take private Electronic Arts, a video games company. Trump’s son-in-law, Jared Kushner, was involved in putting together the deal, in which the PIF will be the largest stakeholder.
The Saudi government and major state investors, including the PIF and Saudi Aramco, are relying increasingly on borrowing, as oil revenue has declined. In the first three quarters of 2025, oil revenue as recorded in the budget fell by 23% year-on-year.
With spending at a similar level to the previous year, despite a 20% drop in capital expenditure, the fiscal deficit during this period more than trebled to USD48.5bn. As a result, external borrowing rose by USD16bn during January-September to reach USD143bn (see SAUDI ARABIA: Budget deficit will raise debt levels – October 1, 2025).
The tightness of foreign exchange liquidity in Saudi Arabia has been reflected in the shift of net foreign assets of commercial banks into deficit since mid-2024. The deficit reached about USD40bn as of end-September, according to the central bank.
For US investment banks, Saudi Arabia’s thirst for capital has been a major attraction, and as yet there is little sign of concern about the country’s credit rating. Public debt has risen, but only to 32% of GDP. However, the squeeze on Saudi oil revenue raises questions about the feasibility of some of the huge investments that are supposed to flow into the United States.
Oil
As far as Trump is concerned, Saudi Arabia’s oil production increases since the start of 2025 have been welcome, as they have helped keep US gasoline prices down (see SAUDI ARABIA: Oil policy faces uncertain outlook – November 25, 2024 and see SAUDI ARABIA: Oil policy will change – September 26, 2024).
Saudi Arabia and its fellow OPEC+ members are banking on their expectations of robust demand to move oil prices upwards in due course, which could raise bilateral tensions.
Meanwhile, Saudi oil revenue is a long way short of what is required to cover its spending and generate sufficient funds to boost its foreign investments.
