Saudi Arabia's quiet retreat from American stocks

On the twenty-fifth anniversary of the September 11th attacks, at the reading of the names at ground zero, a widow used her turn at the microphone to blame every administration since for shielding the kingdom from the consequences of its alleged role. "Administration after administration," she said, "chose to protect the Saudis instead of standing with the 9/11 families." It is a speech that recurs each September, and it is easy to file under ritual. The interesting thing is what the two governments have been doing, beneath the ceremony, with the money.

Look at the Public Investment Fund (PIF), the Saudi sovereign wealth fund and, for the past decade, one of the largest foreign holders of American stock. That role is quietly ending. From a peak of about $56bn in 2021, the fund's disclosed portfolio of US-listed equities has fallen to roughly $12bn by early 2026 — a retreat of nearly four-fifths. The selling accelerated in 2025: it dumped Meta, Shopify, PayPal, Alibaba and FedEx in the second quarter, then Pinterest, Linde, Prologis and Air Products in the third, leaving a book so thin that analysts describe it, accurately, as a handful of names. What it kept, tellingly, is Uber, its largest position, plus Lucid and Electronic Arts.

The arithmetic, first

There is an official explanation for all this, and it deserves to be taken at full strength before anyone reaches for conspiracy. The PIF has been pulling capital home to pay for Saudi Arabia's domestic programme, Vision 2030, and it is doing so at a disadvantageous moment: subdued oil prices have widened the budget deficit and squeezed the state's only meaningful source of revenue. The fund deployed $57bn in priority sectors at home in 2024 and has said it wants to put $70bn to work in Saudi Arabia after this year, with the "lion's share" staying domestic. Its own books felt the strain: total assets under management fell by about $10bn in 2025, the first decline this decade, to roughly $906bn. None of that requires a political explanation. A rich state that is suddenly poorer and has promised to build a desert metropolis is going to cash in its foreign equity chips.

The politics that ran alongside

The trouble is that the accounting and the politics marched in the same direction, and it would be complacent to pretend the coincidence is the whole story. The families' campaign is not merely rhetorical. In 2016 Congress passed the Justice Against Sponsors of Terrorism Act, creating a legal avenue for 9/11 claims to proceed regardless of Saudi Arabia's status; and in August 2025 a federal judge in New York refused to dismiss the mass 9/11 case against the kingdom, finding evidence that two Saudi employees had assisted the hijackers and letting the claims proceed to the merits.

Even so, be clear about what the ruling did not do. A judgment against the kingdom — itself years away, since liability has yet to be proven — would not automatically reach the fund's shares; the law still puts steep hurdles in the way of seizing a foreign state's commercial property. It would be wrong to say the courts "caused" the sell-off, and no evidence suggests the families' pressure alone moved a single holding. What the politics do is change the incentive. A sovereign that faces an open legal question about the American government's willingness to stand behind it will rationally prefer money in forms a court cannot easily see or attach.

That preference shows in where the cash went. The retreat from public listings has not meant a retreat from the American economy. The fund claims to have invested roughly $170bn in the United States since 2017, most of it through channels invisible to a 13F filing: private funds anchored with Goldman Sachs and BlackRock, real estate, joint ventures and stakes in unlisted companies. The crown prince's return to Washington — where the fourth-quarter filing landed days before his first White House visit since 2018 — has been accompanied by Saudi pledges to put hundreds of billions more into the country. The mix is the message: visible equity out, harder-to-seize private money in, all while the headline "Saudi investment in America" number rises.

Poured money, political loyalty

The sharpest proof that this money is political before it is commercial sits in a company that kept the fund's favour. Lucid, the luxury electric-car maker, is a case study in what it means to have a sovereign as shareholder of last resort. The PIF and its affiliate own roughly 57% of the company, and it behaves like an owner: this spring it extended another $550m of preferred financing and a $2.5bn loan line to keep the carmaker funded. The arithmetic is brutal — by one analysis the kingdom has put about $9bn into a firm worth some $3.3bn, with $15.6bn of accumulated losses, and it keeps going. No commercial lender would sustain that relationship. A state buying a flagship of its electric-vehicle ambitions, and a foothold in the American market, would.

For the ordinary holder the lesson is not that Saudi-linked stocks will crash at the next anniversary. The ceremony is a leading indicator of the diplomacy, not the end point of it. It is that the capital propping up names like Lucid answers to a treasury, a budget deficit and a diplomatic emergency before it answers to a company's margins. A government that invests this way is loyal until the day it is not, because its loyalty is negotiated elsewhere — between Riyadh, Washington and the families whose claim neither side can finally extinguish. Sovereign money is often described as permanent and patient; the Saudi version is neither. That is reason enough to treat any thesis built on "the Saudis are buying" as a bet on a diplomatic relationship, and to keep one's own eggs in more baskets than a single crown prince's.