Growing Saudi film industry driving job creation, economic growth

Growing Saudi film industry driving job creation, economic growth
To date, more than SR3.5 billion ($933 million) has been invested in cinema infrastructure, content services, and technology by local and international players. (AFP)
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Updated 28 June 2025
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Growing Saudi film industry driving job creation, economic growth

Growing Saudi film industry driving job creation, economic growth
  • Over 630 cinema screens opened across 60 locations in 2024, with ambitions to exceed 1,000 by 2030

RIYADH: Since lifting the cinema ban in 2018, Saudi Arabia has rapidly transformed its film industry into a key engine of job creation and economic diversification.

By 2024, the Kingdom had opened over 630 cinema screens across 60 locations, with ambitions to exceed 1,000 by 2030.

This expansion is expected to create over 7,000 direct and indirect jobs, contributing to a broader entertainment ecosystem projected to generate around 450,000 employment opportunities and push the sector’s gross domestic product contribution to 4.2 percent by the end of the decade. 

Building an industry

To date, more than SR3.5 billion ($933 million) has been invested in cinema infrastructure, content services, and technology by local and international players. 

According to Shahid Khan, partner and global head of media, entertainment, sports, and culture at Arthur D. Little Middle East, these investments have extended beyond major cities into developing regions, promoting more inclusive economic growth.

“A notable example is Muvi Cinemas, the first Saudi-owned cinema brand and current market leader, which has rapidly expanded to establish itself as the market leader. It has employed hundreds of Saudis and actively invested in workforce localization through training programs aimed at building local capabilities in cinema operations and management,” Khan said.

He added that box office revenues have held steady at SR900 million annually for the past three years, with food and beverage sales contributing over SR500 million each year — strengthening the sector’s role in Saudi Arabia’s non-oil revenue diversification. Khan also pointed to the positive spillover into local film production, supported by regulatory incentives from the Film Commission, which is laying the groundwork for sustainable, locally driven industry growth. 

Films produced in these locations help showcase the Kingdom’s unique natural and historical assets, sparking interest among global audiences and encouraging tourism.

Abeer Al-Husseini, partner at Fragomen

According to Abeer Al-Husseini, partner at Fragomen, the establishment of entities like the Film Commission and the General Entertainment Authority, alongside the development of advanced studios, has opened up new opportunities in creative, technical, and support roles. She noted that this momentum is also fueling demand for film and media education.

“Event management, hospitality and cultural tourism have similarly benefited, particularly around major film festivals and heritage venues. Incentives like the Cash Rebate Incentive Program, which offers up to 40 percent in non-refundable grants, draw in international productions and further drive job creation,” Al-Husseini said.

She added that Saudization is making steady progress, with full nationalization in cinema sales and supervisory roles and 50 percent in technical jobs, placing Saudi talent at the center of the sector’s growth.

Al-Husseini also emphasized the broader impact of cultural initiatives such as the Red Sea International Film Festival, which supports global filmmakers while boosting local tourism and ancillary sectors including entertainment, food, media, and digital content. 

Vision 2030 and a cinematic future

Saudi Arabia is positioning itself as an international production hub by capitalizing on a combination of geographic diversity, government incentives, and growing infrastructure. 

From Arthur D. Little’s standpoint, initiatives such as Film AlUla have played a crucial role since 2020, attracting over 120 productions to the region, including international titles like Kandahar and Norah.

“Meanwhile, NEOM has become a cornerstone of Saudi Arabia’s emerging media industry. Over the past two years, the region has reportedly produced more than 35 projects spanning various formats, genres, and production scales,” said Khan, adding: T”his includes high-profile projects like the Apple TV+ series Foundation and the international blockbuster Desert Warrior, which employed hundreds of Saudis in areas such as set design, catering, security, and logistics.” 

He noted that these projects are helping build a skilled local workforce, with government cash rebates and infrastructure investment creating the foundations for a world-class production ecosystem. The country’s target of producing 100 feature films by 2030 is also expected to unlock opportunities across tourism and hospitality. 

FASTFACTS

• This expansion is expected to create over 7,000 direct and indirect jobs, contributing to a broader entertainment ecosystem projected to generate around 450,000 employment opportunities and push the sector’s gross domestic product contribution to 4.2 percent by the end of the decade.

• While meeting Saudization requirements will remain a key challenge as demand for skilled workers rises, the influx of international talent presents valuable opportunities for collaboration, training, and upskilling the local workforce.

“A compelling example of this potential can be seen in Australia, where Mission Impossible: 2 significantly boosted tourism — contributing to approximately 200 percent increase in visitors to the film location within a few years. Similarly, Saudi Arabia’s cinematic exposure is poised to elevate the Kingdom’s profile on the global stage, attracting tourists, stimulating local economies, and advancing the goals of Vision 2030,” he said.

Al-Husseini underscored the role of AlUla and NEOM in promoting the Kingdom’s unique cultural and futuristic offerings, both critical to advancing Vision 2030.  “Films produced in these locations help showcase the Kingdom’s unique natural and historical assets, sparking interest among global audiences and encouraging tourism. This boost in tourism supports local businesses in hospitality, retail and transport,” she said.

Looking ahead, Arthur D. Little’s Khan said that by 2025, the Saudi film sector is expected to create thousands of new jobs across related industries, supported by generous incentives such as a 40 percent production rebate and dedicated funding programs. University-level film and media programs are also helping nurture the next generation of local talent.

“Tourism will see strong gains as well. AlUla and NEOM’s media zone is expected to draw hundreds of thousands of creative professionals and visitors annually once fully operational,” he said.

Khan highlighted key opportunities in developing Arabic-language content, forming public-private partnerships to support talent pipelines and infrastructure, and exporting Saudi films to neighboring Gulf Cooperation Council, African, and Asian markets. However, he noted the need to address challenges such as building a skilled workforce, navigating cultural sensitivities, and adapting to shifts toward digital streaming platforms.

Al-Husseini emphasized that Saudi Arabia’s film industry is on course to boost employment and growth, with infrastructure investments — like AlHisn Studios — strengthening its capacity for large-scale productions.

“Partnerships with global production companies are on the rise, as seen in the MBS Group’s recent agreement to manage and operate AlUla Studios. At the same time, training programs and workshops are being rolled out to develop local talent while attracting international professionals, supporting long-term industry sustainability,” she said.

She concluded that while meeting Saudization requirements will remain a key challenge as demand for skilled workers rises, the influx of international talent presents valuable opportunities for collaboration, training, and upskilling the local workforce.


Closing Bell: Saudi main index closes in green at 10,922

Closing Bell: Saudi main index closes in green at 10,922
Updated 11 sec ago
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Closing Bell: Saudi main index closes in green at 10,922

Closing Bell: Saudi main index closes in green at 10,922

RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Tuesday, as it gained 82.40 points, or 0.76 percent, to close at 10,921.85. 

The total trading turnover of the benchmark index was SR5.49 billion ($1.46 billion), with 164 of the listed stocks advancing and 83 declining. 

The Kingdom’s parallel market Nomu, however, shed 38.57 points to close at 26,852.82. 

The MSCI Tadawul Index advanced by 0.8 percent to 1,408.36. 

The best-performing stock on the main market was Saudi Printing and Packaging Co. The firm’s share price increased by 9.98 percent to SR12.12. 

The share price of Ades Holding Co. rose by 9.97 percent to SR14.45. 

Saudi Industrial Investment Group also saw its stock price climb by 8.3 percent to SR19.45. 

Conversely, the share price of United Cooperative Assurance Co. dropped by 7.91 percent to SR5.94. 

On the announcements front, Ades Holding Co. announced that its subsidiary ADES International Holding Ltd. signed an agreement to acquire all issued and outstanding shares of Shelf Drilling Ltd. 

In a Tadawul statement, Ades Holding revealed that the deal, valued at SR1.42 billion, will be funded through the company’s existing credit facilities.

The company added that this latest development could help the firm position itself as a global leader in the shallow-water drilling segment, with the combined entity operating a fleet of 83 offshore jack-up rigs, including 46 premium units, following the addition of 33 jack-ups through this new transaction. 

Founded in 2012, Shelf Drilling is an international shallow water offshore drilling contractor with rig operations across the Middle East, Southeast Asia, and India, as well as West Africa, the Mediterranean, and the North Sea. 

Saudi Cement Co. announced that its net profit for the first half of this year stood at SR204 million, representing a 1.44 percent increase compared to the same period in 2024. 

In the Tadawul statement, the cement manufacturer attributed the rise in net profit to an increase in sales revenue, a decrease in selling and distribution expenses, and a drop in finance charges.

The share price of Saudi Cement Co. edged up by 0.57 percent to SR38.72. 

Bupa Arabia for Cooperative Insurance Co. reported a net profit of SR666.48 million in the first six months of this year, marking a decline of 12.76 percent compared to the same period in 2024. 

The stock price of the insurance firm declined by 3.91 percent to SR154.80. 

Taiba Investments Co. said that its net profit for the first half stood at SR238.4 million, marking a year-on-year rise of 29.84 percent. 

In a Tadawul statement, the company said that the rise in net profit was driven by higher operating revenues across the firm’s various segments. 

Taiba Investment Co.’s share price edged down by 1.56 percent to SR39.10. 

Arabian Mills for Food Products Co. reported that it recorded a net profit of SR117.55 million in the first half of this year, representing an increase of 15.81 percent compared to the same period in 2024. 

According to a statement, this rise in profit was driven by higher revenues from the flour segment, along with improved management of administrative fees, as well as operating expenses, and lower finance costs. 

The share price of Arabian Mills for Food Products Co. rose by 0.59 percent to SR44.16. 

Fawaz Abdulaziz Alhokair Co., also known as Cenomi Retail, widened its net loss to SR83 million in the first six months of this year, compared to an SR68 million loss it incurred in the same period in 2024. 

The share price of Cenomi Retail dropped by 3.83 percent to SR27.12.


Kuwait, Qatar, UAE maintain non-oil growth momentum; Egypt shows recovery signs while Lebanon struggles

Kuwait, Qatar, UAE maintain non-oil growth momentum; Egypt shows recovery signs while Lebanon struggles
Updated 05 August 2025
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Kuwait, Qatar, UAE maintain non-oil growth momentum; Egypt shows recovery signs while Lebanon struggles

Kuwait, Qatar, UAE maintain non-oil growth momentum; Egypt shows recovery signs while Lebanon struggles

RIYADH: Non-oil business activity in the Middle East showed mixed trends in July, with Kuwait, the UAE, and Qatar maintaining growth, while Egypt demonstrated signs of recovery and Lebanon remained under pressure.

According to the latest Purchasing Managers’ Index report released by S&P Global, Kuwait’s PMI ticked up to 53.5 in July from 53.1 in June, signalling a solid monthly improvement in the health of the non-oil private sector. 

This robust performance of non-energy business conditions in Kuwait aligns with the wider trend observed in the Gulf Cooperation Council region, where countries are pursuing economic diversification efforts to reduce dependence on crude revenues. 

“Kuwait’s non-oil private sector began the second half of 2025 in much the same way as it ended the first, with output and new orders up markedly again in July,” said Andrew Harker, economics director at S&P Global Market Intelligence. 

Survey panelists linked higher new orders in July to advertising efforts and price discounting, which helped to further raise the output. 

According to the report, employment levels in Kuwait’s non-oil sector remained broadly unchanged in July, following a record increase in June. 

S&P Global added that inflationary pressures softened in the seventh month of the year, with purchase prices and staff costs increasing at the slowest rates in six and four months, respectively.

“Firms will have been cheered by a softening of inflationary pressures during the month, but the reluctance to hire extra staff did mean that backlogs of work accumulated again,” said Harker. 

The survey data also revealed that Kuwaiti companies remained strongly optimistic about future growth, on the hopes that output will rise further in the remaining months of the year. 

“The prospects for further expansions in new business in the months ahead appear bright, and we’ll hopefully see this reflected in renewed hiring activity soon,” added Harker. 

UAE’s PMI declines amid geopolitical tensions

UAE’s PMI slipped to 52.9 in July from 53.5 in June but remained well above the 50 mark that signals expansion of the non-energy business conditions. 

S&P Global attributed this decline to a slowdown in new business growth across the non-oil economy, as ongoing regional tensions made some clients hesitant to commit to new spending.

Panelists who took part in the survey also pointed to weaker tourism activity and headwinds from global trade disruptions to lower activities in July. 

Despite this decline, output expanded sharply in June, as non-oil firms in the Emirates sought to prevent further increases in backlogs of work.

“Business conditions improved in July, but the rate of growth was the weakest since the middle of 2021. As has been the case recently, output was supported by positive demand trends,” said David Owen, senior economist at S&P Global Market Intelligence. 

He added: “New order volumes helped firms to expand, but this trend is declining, with the latest data indicating the softest rise in incoming new work in almost four years.” 

The softer increase in new orders contributed to a slight easing in the rate of activity expansion in July, which was further dampened by intensified competitive pressures

The report also revealed that some firms reported that output increased in response to new sales opportunities, rising client incomes, advancements in technological investment, and the clearance of pending work.

The July survey data indicated that job growth softened in over the month, marking the weakest uplift in four months. 

“Should regional tensions ease, we may see a recovery in sales growth in the coming months. This would also be supported by the subdued price environment, with input costs rising only modestly despite the pace of increase reaching a three-month high,” said Owen. 

He added: “Nevertheless, the ongoing trends of rising competition, limited inventory, constrained hiring growth and relatively low confidence among surveyed firms suggest that downside risks remain elevated.” 

In the same report, S&P Global revealed that Dubai’s PMI rose to 53.5, up from a 45-month low of 51.8 in June, signalling a solid upturn in operating conditions across the Emirate’s non-oil private sector economy.

Dubai non-oil firms also expanded their output at the sharpest rate in five months in July, while continuing efforts to increase employment and inventories.

Non-energy business conditions improve in Qatar

In a separate report, S&P Global revealed that business conditions in Qatar’s non-energy sector continued to improve in July, with the country’s PMI remaining above the 50-expansion zone for the 19th consecutive month. 

The country’s PMI fell to 51.4 in July from 52 in June.

The report revealed that non-energy private sector employment in Qatar increased at the second-strongest rate in the eight-year survey history, driving a further sharp increase in wages.

“The PMI remained above the neutral threshold at 51.4 in July, signalling sustained overall growth in the non-energy private sector. But the headline figure continues to mask underlying weakness in demand and output, being heavily supported by another round of strong employment growth,” said Trevor Balchin, economics director at S&P Global Market Intelligence. 

Companies in the non-energy private sector remained optimistic regarding the 12-month outlook for activity in July, due to expected growth in investment, tourism, and industrial development, as well as a recovery in construction, population expansion, and government initiatives. 

Egypt’s PMI nearing growth trajectory 

In another report, S&P Global revealed that Egypt’s PMI increased to 49.5 in July, up from 48.8 in June, but still remaining below the 50 no-change threshold for the fifth consecutive month. 

According to S&P Global, Egyptian non-oil business conditions deteriorated for the fifth consecutive month in July, although the decline was less severe than in June, with firms reporting softer contractions in both activity and new orders.

The report added that businesses increased headcounts for the first time since last October, while cuts in purchases softened. 

“Although the Egypt PMI stayed below 50 in July, indicating a worsening of non-oil business conditions, the latest survey data provided some cause for optimism. Several firms reported the securing of new work, which helped to soften the rate of decline in sales,” said Owen. 

He added: “Businesses also had the confidence to hire new staff, leading to an increase in employment for the first time in nine months, if only a fractional one.”

Input prices also rose at a slightly quicker pace in July, with survey panelists attributing this trend to higher costs for items such as cement, fuel and packaging. Increased staff wages also contributed to cost pressures, although the rate of growth was mild. 

Regarding future activity, companies in Egypt continued to express concerns about demand strength and broader economic uncertainty, with optimism improving slightly from June’s record low. 

Lebanon’s PMI drops 

According to the latest report, Lebanon’s private sector economy remained under pressure at the start of the second half of the year, with the PMI in July dropping to 48.9 from 49.2 in June. 

The report revealed that business activity volumes across Lebanon’s private sector fell further in July, extending the current sequence of contraction to five months, driven by subdued demand conditions, particularly from abroad.

“The July 2025 BLOM Lebanon PMI dropped to 48.9. This result was not unexpected as the economy lacked any meaningful demand stimulus: the government does not have any money to spend and the private sector is not able and willing to spend,” said Ali Bolbol, chief economist and head of research at BLOMInvest BANK. 

Private sector companies in Lebanon lowered their purchasing volumes as a part of their efforts to reduce costs. 

Looking ahead, surveyed companies remained pessimistic toward the year-ahead outlook for business activity, with these firms expressing negative consequences of a potential escalation of conflict and tensions across the Middle East region. 


Saudi Arabia’s non-oil growth stays strong despite softer July PMI

Saudi Arabia’s non-oil growth stays strong despite softer July PMI
Updated 05 August 2025
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Saudi Arabia’s non-oil growth stays strong despite softer July PMI

Saudi Arabia’s non-oil growth stays strong despite softer July PMI

RIYADH: Saudi Arabia’s non-oil business activity continued to expand in July, even as growth momentum softened, with the Purchasing Managers’ Index easing to 56.3, down from 57.2 in June, a market tracker showed. 

Compiled by S&P Global for Riyad Bank, the PMI remained well above the neutral 50-point threshold, signaling ongoing improvement in private sector operating conditions. 

The robust growth in Saudi Arabia’s non-oil business activity aligns with the broader goals of Vision 2030, which aims to diversify the Kingdom’s economy and reduce its reliance on oil revenues. 

This comes as Saudi Arabia’s economy grew by 3.9 percent year on year in the second quarter of 2025, driven by strong non-oil sector performance, according to flash estimates released last month by the General Authority for Statistics. 

Naif Al-Ghaith, chief economist at Riyad Bank, said: “Saudi Arabia’s non-oil economy remained on a solid growth track in July, supported by higher output, new business, and continued job creation. Although the headline PMI edged down to 56.3 from 57.2 in June, the reading still pointed to a healthy level of activity across the private sector.” 

He added: “Firms continued to benefit from ongoing project work, resilient domestic demand, and focused marketing efforts, even as some indicators showed signs of cooling compared to earlier in the year.” 

Al-Ghaith noted that the slight dip in the headline index was primarily due to a moderation in new order growth. He said businesses were still experiencing improved demand, though “competitive pressures and more cautious client spending weighed on the pace of expansion.” 

He also pointed out that external demand was softer and that purchasing activity had increased at a slower pace. 

On the employment front, Al-Ghaith said firms continued to expand their workforce to support rising activity, with “July marking another solid month of hiring as companies worked to keep operations running smoothly.” 

He further noted that firms expect growth to continue over the coming year, underpinned by steady demand, strong pipelines, and Vision 2030-linked investments. 

Employment is expected to remain supportive, although rising input costs and wages led to price hikes — especially in services, construction, and manufacturing. 

The PMI report also showed that non-oil private sector output grew strongly in July, driven by ongoing projects and new orders. However, the pace of expansion was the slowest in three and a half years. 

Order books continued to develop, buoyed by solid domestic demand and active sales efforts. However, growth was partially offset by intensifying competition, lower footfall, and the first drop in export orders in nine months, as firms faced challenges in attracting new foreign clients. 

In response to rising activity and backlogs, firms recorded another sharp increase in hiring, following June’s 14-year employment peak. The uptick was attributed to capacity constraints and growing workloads. 

Inventory levels rose significantly in July, particularly among manufacturers and wholesale and retail firms, even as new input purchases slowed. Delivery times improved but at a slower rate, in part due to customs delays. 

Input prices in the Kingdom’s non-oil sector increased strongly during the month — albeit at a slightly slower pace than in the second quarter — driven by steep salary hikes to retain staff. This contributed to a rise in selling prices for the second straight month. 


MENA IT spending to reach $169bn in 2026 

MENA IT spending to reach $169bn in 2026 
Updated 05 August 2025
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MENA IT spending to reach $169bn in 2026 

MENA IT spending to reach $169bn in 2026 

RIYADH: Information technology spending in the Middle East and North Africa region is forecast to reach $169 billion in 2026, marking an 8.9 percent increase from 2025, according to the latest projections from Gartner.

The surge is driven by accelerated adoption of artificial intelligence, intelligent automation, and AI-optimized infrastructure upgrades, as organizations across the region prioritize digital transformation amid global economic and geopolitical uncertainties. 

Gartner’s forecast is already taking shape in Saudi Arabia, where AI adoption is surging, as seen with the launch of Humain, a state-backed AI company unveiled in May by the Public Investment Fund.

Positioned at the forefront of the Kingdom’s ambition to become a global AI hub, Humain focuses on deploying advanced AI infrastructure, developing Arabic multimodal large language models, and forging strategic partnerships with global technology leaders such as Nvidia, AMD, and Amazon Web Services. 

“The MENA region is rapidly emerging as a global tech powerhouse, with the Gulf Cooperation Council leveraging its stability, infrastructure and forward-looking policies to attract global partners and build digital skills that empower innovation and support resilient AI-driven economies,” said Mim Burt, practice vice president at Gartner. 

“Even amid global economic and geopolitical uncertainty, chief information officers in MENA are making strategic investments in AI, intelligent automation and multi-cloud strategies, while strengthening cyber defenses and advancing talent upskilling,” Burt added. 

Data center systems will remain the highest-growth segment in 2026, with spending projected to increase by 37.3 percent to $13 billion. 

However, Gartner noted that the pace will moderate compared to 2025’s 69.3 percent growth, as the market transitions from rapid buildouts to more incremental and sustained investments. 

“Data center system spending is expected to accelerate as MENA CIOs and technology leaders invest in AI-enabled software and AI-optimized infrastructure,” said Eyad Tachwali, vice president, advisory at Gartner. 

“This surge is largely fueled by pent-up demand for generative AI and advanced machine learning, which depend on robust computing power for large-scale data processing,” Tachwali added. 

“Most of this demand is being driven by governments, hyperscalers, technology providers and organizations focused on developing and deploying AI models, rather than traditional enterprises or consumers,” he noted. 

Software spending is also expected to see significant growth, rising 13.9 percent to $20.4 billion in 2026, as organizations across MENA integrate GenAI capabilities into their operations. 

Gartner projects that by 2028, 75 percent of global software spending will be directed toward solutions embedded with GenAI functionality. 

“CIOs will increasingly be offered embedded GenAI capabilities in enterprise applications, productivity and developer tools, more advanced large language models as well as AI-optimized servers to support AI-as-a-service,” said Burt. “Providers are also exploring new pricing models across software and hardware to drive revenue.” 

IT services spending in the region is projected to grow 8.3 percent in 2026, reflecting the shifting priorities as AI becomes a central component of enterprise strategies. 

“With the rapid acceleration of AI infrastructure and adoption in MENA, CIOs must move beyond GenAI as a productivity tool and embed it into the heart of their business strategy,” said Tachwali. 

“The real competitive edge will come from building strong data foundations, composable technology platforms and cultivating AI-fluent talent — core enablers for unlocking differentiated value from AI,” he added. 

Initiatives in this field across the region include those contained in Saudi Arabia’s broader Vision 2030 strategy, under which the Saudi Data and AI Authority is spearheading nationwide efforts to embed AI across economic sectors and elevate the country’s competitiveness. 

Similarly, the UAE continues to reinforce its leadership in the sector with its UAE AI Strategy 2031, which aims to position the nation among the top AI-driven economies worldwide. 

The UAE’s partnership with OpenAI under the Stargate UAE initiative will establish a 5-gigawatt AI campus in Abu Dhabi, providing nationwide ChatGPT access and positioning the country as a regional AI hub with global-scale compute infrastructure. 


Global M&A hits $2.6tn peak year-to-date, boosted by AI and quest for growth

Global M&A hits $2.6tn peak year-to-date, boosted by AI and quest for growth
Updated 05 August 2025
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Global M&A hits $2.6tn peak year-to-date, boosted by AI and quest for growth

Global M&A hits $2.6tn peak year-to-date, boosted by AI and quest for growth
  • M&A value up 28 percent from last year, driven by US megadeals
  • AI and regulatory changes boost corporate growth motivations
  • Private equity re-enters market, fueling deal activity

LONDON: Global dealmaking has reached $2.6 trillion, the highest for the first seven months of the year since the 2021 pandemic-era peak, as a quest for growth in corporate boardrooms and the impact of a surge in AI activity has overcome the uncertainty caused by US tariffs.

The number of transactions to August 1 is 16 percent lower than the same time last year, but their value is 28 percent higher, according to Dealogic data, boosted by US megadeals valued at more than $10 billion.

They include Union Pacific Corp’s proposed $85 billion acquisition of small rival Norfolk Southern and OpenAI’s $40 billion funding round led by Softbank Group.

The upsurge will be a relief to bankers who began the year with expectations the administration of US President Donald Trump would lead to a wave of consolidation.

Instead, his trade tariffs and geopolitical uncertainty made companies pause until renewed confidence in corporate boardrooms and the US administration’s anti-trust agenda changed the mood.

“What you’re seeing in terms of deal rationale for transactions right now is that it’s heavily growth-motivated, and it’s increasing,” Andre Veissid, EY Global Financial Services Strategy and Transactions Leader, told Reuters.

“Whether it’s artificial intelligence, the change in the regulatory environment, we see our clients not wanting to be left behind in that race and that’s driving activity.”

Compared with August 2021, when investors, rebounding from pandemic lockdowns drove the value of deals to $3.57 trillion, this year’s tally is nearly a $1 trillion, or 27 percent, lower.

Still deal-makers at JP Morgan Chase have said there is more to come, with companies pursuing bigger deals in the second half of the year as executives adapt to volatility.

“People have got used to the prevailing uncertainty, or maybe the unpredictability post-US election is just more predictable now,” Simon Nicholls, co-head of Slaughter and May Corporate and M&A group, said.

Nigel Wellings, partner at Clifford Chance said the market was moving beyond tariffs. “Boardrooms are seeing the M&A opportunity of a more stable economic environment and positive regulatory signals. But it is not a frothy market.”

From health to tech

While the healthcare sector drove M&A in the years after the pandemic, the computer and electronics industry has produced more takeover bids in the US and the UK in the last two years, according to Dealogic.

Artificial intelligence is expected to drive more dealmaking. M&A activity has increased around data center usage, such as Samsung’s $1.7 billion acquisition of Germany’s FlaktGroup, a data center cooling specialist.

Palo Alto Networks $25 billion deal for Israeli cybersecurity peer CyberArk was the largest deal in Europe, Middle East and Africa so far this year as rising AI-driven threats push companies to adopt stronger defenses.

Private equity, which had been sitting on the sidelines, has once again been active, with Sycamore Partners’ $10 billion deal to take private Walgreens Boots Alliance and rivalling 4.8 billion pound offers from KKR and Advent for UK scientific instrument maker Spectris.

The US was the biggest market for M&A, accounting for more than half of the global activity. Asia Pacific’s dealmaking doubled over the same year to date period last year, outpacing the EMEA region.