Naver, PIF-backed JV join hands for Saudi Arabia’s smart cities

South Korean online portal giant Naver Corp. is planning to accelerate Saudi Arabia’s digital transformation in partnership with a tech firm backed by Public Investment Fund (PIF), the world’s sixth-largest sovereign wealth fund.

Naver and the Riyadh-based iot squared on Dec. 3 entered into a non-binding agreement to jointly build a digital twin platform in Saudi Arabia, the Korean firm said on Thursday. The memorandum of understanding follows a digital twin project partnership that Naver and the Saudi government signed last month.  

Founded in April 2022, iot squared is a 50:50 joint venture between PIF and state-owned Saudi Telecom Company (stc). The JV provides Internet of Things (IoT) solutions to the industrial, logistics, public and smart city sectors.

Naver and iot squared will cooperate in the development and operation of Saudi Arabia’s digital twin, or virtual representation of the country’s public systems. They will also use robotics, autonomous driving and other advanced technologies for planning, monitoring and simulating Saudi Arabia’s smart city projects.

During Korean President Yoon Suk Yeol’s state visit to Saudi Arabia last month, Naver and Saudi Ministry of Municipal, Rural Affairs and Housing (MOMRAH) signed a framework agreement to build and operate a digital twin platform for five major cities in the country – Riyadh, Medina, Jeddah, Dammam and Mecca – for five years from 2024.

Under the agreement, Naver will use its online platform, which can precisely replicate the real world environment, for Saudi Arabia’s urban planning, monitoring and flood forecasting. The contract is valued at more than $100 million, according to Naver.

The Korean portal giant will establish a subsidiary in Saudi Arabia and build cloud regions, or geographical areas for data center operations.

Naver will expand its cooperation with Saudi firms as the digital twin will be built as an open platform that can create synergy with partners, said Chae Seon-ju, the firm’s chief communications officer. The company will work to enhance Saudi Arabia’s cutting-edge smart city technologies, she added.

Write to Seung-Woo Lee at leeswoo@hankyung.com

Jihyun Kim edited this article.