Saudi Arabia’s Chance to Lead the Middle East

As a boy, Mohammed bin Salman played video games alone in his family palace because Saudi Arabia’s religious police permitted no public entertainment. The imaginative boy came to believe that anything possible in a video game is possible in real life.

Now, as Crown Prince of Saudi Arabia, his dream is equally audacious: He seeks to maneuver among Iran, Israel, and the United States to bring peace and prosperity to the Middle East. His nation has emerged unscathed from the 12-day war between Israel, the U.S and Iran. Aside from Israel and the U.S., MBS, as he is called, is the clear winner thus far.

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But there is a big difference between his win and those of Israel and the U.S.: the level of risk. Israel risked its survival, Iran risked its nuclear program, and the U.S. risked its global credibility in the 12-day war. Saudi Arabia risked nothing. The Crown Prince triangulated among the three key nations publicly condemning Israel’s attacks and quietly urging President Donald Trump to stay out of the war though he clearly knew Iran’s nuclear and regional ambitions were a threat to him. In short, MBS played a skillful defensive game and wound up a passive winner.

But to secure what he really wants—a stable region focused on prosperity, not just Palestinian-Israeli grievances—he will need to be a visible leader in the region, openly pressing his goals, not cynically playing all parties in private. Unlike Trump, MBS doesn’t crave the international spotlight. He once described himself to me as a boy so shy he refused to perform in a second-grade play because he simply couldn’t speak in front of an audience.

At home, MBS opened his tenure as the kingdom’s de facto leader by banning the religious police from Saudi streets and liberating women to join the kingdom’s economy. He followed that by jailing royal relatives and businessmen and deposing his cousin and replacing him as crown prince. Today, he’s firmly in control at home. He can do essentially whatever he wants without sparking any visible opposition. But the international arena is a much tougher one to play in, one in which no power, not even a great power, is in full control. Still, he must secure greater clout abroad where his power is more untested.

No one has a greater financial stake in peace in the Middle East than Saudi Arabia. The Crown Prince has invested trillions of dollars in his grand mega projects intended to wean the kingdom off dependence on oil revenues. Protecting those investments from destruction by Iran or its proxies is a top priority. Yet some of those projects are in financial trouble precisely because the regional turmoil has made it difficult to attract the needed foreign investment and expertise required to realize his many grand projects. For instance, The Line, a 100-mile long mirrored city the height of New York’s Empire State Building run by AI is now envisioned to be only 1.5 miles by 2030, so costly and complex is its construction. This futuristic city is the centerpiece of Neom, a development in northwest Saudi Arabia envisioned as a new high-tech Silicon Valley. But to achieve that dream, the Crown Prince needs Western investment and expertise—and ideally, cooperation with Israel’s high-tech capabilities.

Foreign investment in the kingdom has been slow to come. In 2024, foreign direct investment was $20.7 billion well below the $29 billion target and far below the goal of $100 billion annually by 2030.  The war in Gaza since October 2023 has likely depressed the willingness of international investors to put money into the kingdom.  So far, Amazon Web Services, Oracle, and Microsoft all together have invested a total of roughly $9 billion in cloud-based technology solutions in Saudi Arabia—a small fraction of what’s needed to achieve MBS’ ambitions. So, the Crown Prince’s goal of regional prosperity requires peace. 

To truly boost foreign investment into the kingdom almost certainly also requires Saudi to establish diplomatic relations with Israel. Not only could that lower tensions, making investments safer, but it also would create a vast land bridge from Asia to Europe. This remains a dream of the Saudi Crown Prince who sees Neom as the sweet spot in this new commercial enterprise built on Israeli technology and Saudi money. He was on the verge of recognizing Israel when the Gaza war broke out, putting those relations on hold. With Iran weakened, Israel the clear military power in the region, and President Trump still pushing for Saudi-Israeli diplomatic relations, the issue will now reemerge.

Iran has long roiled Saudi-Israeli relations by using the Israel-Palestine issue as a wedge. Many Arab states, including Saudi Arabia favor a two-state solution where Israelis and Palestinians live in independent states. Iran however, has advocated for the destruction of Israel and has helped fund groups like Hamas.  So, Iran’s thrashing in the 12-day war may ease Saudi Arabia’s task of recognizing Israel.

However, polls suggest that 96% of Saudis oppose diplomatic ties with Israel. As such, MBS has doubled-down on his public commitment not to recognize Israel until there is “an independent Palestinian state with East Jerusalem as its capital.”  As a result, MBS now faces many difficult questions. How to attract the investment he needs to create jobs for the growing number of young Saudis entering his workforce? How to convince Palestinians to accept a Jewish state? How to convince Israelis to accept a Palestinian state?  And how to react to Trump’s effort to end the war in Gaza?

The Crown Prince has been masterful at protecting Saudi Arabia’s development. He restored diplomatic relations with Iran, shared intelligence with Israel, formed ties with Russia and China, lured Trump to Saudi for his first foreign visit with a pledge to invest $600 billion in the U.S. All those contradictory moves paid off during the 12-day war. Saudi Arabia was spared. But with Iran much weaker and Israel much stronger, can he seize the opportunity? To do so, Saudi Arabia must go from passive beneficiary to active peacemaker.