PIF from Saudi Arabia would be having cash flow problems after EA agreement

The Saudi Public Investment Fund (PIF), one of the main investors in the $55 billion sale of Electronic Arts (EA) to a group of private investors, reportedly facing a potential cash flow issue. A new report suggests that the PIF will not make major acquisitions soon.

According to The New York Times, the PIF has been impacted by a series of investments that are financially "underwater". The report specifically mentions that the planned city Neom in Saudi Arabia and a ski resort with robot workers are among the PIF assets that are struggling.

The wealth of Saudi Arabia still comes from its extensive oil reserves. However, the kingdom has limitations on the amount of oil it can sell without violating established agreements and treaties. This may indicate that the PIF has been spending resources more quickly than Saudi Arabia can replenish the fund.

The report comes after rumors that Saudi Arabia was supporting Paramount's bid for Warner Brothers, an allegation that Paramount denied.

The PIF spokesperson, Marwan Bakrali, denied the report, telling The New York Times that the fund still holds $60 billion in cash and "similar financial instruments". It is important to note that the EA sale still needs regulatory approval in the US and other countries before being finalized.

The investment in EA will be the largest from the kingdom in the gaming industry to date. Saudi Arabia has already invested in several video game companies, including Nintendo and Take-Two Interactive. In March of this year, the Saudi mobile developer Scopely acquired the video game division of Niantic, taking control of Pokemon Go and other mobile titles. This investment agenda is part of Saudi Arabia's efforts to diversify its financial portfolio and shift attention from the numerous human rights violations in the country.