Saudi Arabia's new Copyright Law took effect on August 1, 2026, replacing a 2003 statute that had governed the Kingdom's creative and digital works for more than two decades (AO Shearman). Buried inside it is Article 26, which permits reproducing a copyrighted work — without the author's permission and without compensation — for the purpose of developing AI products and algorithms. Legal analysts have flagged it as one of the first statutory AI training-data exceptions in the Gulf Cooperation Council (Baker McKenzie).
What the exception actually permits
Article 26 is not a blanket license. It applies only where the copied work was lawfully published, the original copy was lawfully obtained, and — critically — the copying is "limited to what meets the purpose" of the AI development in question, without conflicting with the work's normal commercial exploitation or causing unreasonable prejudice to the rights holder (AO Shearman; Mondaq). Those conditions track the structure of the "three-step test" that has governed international copyright exceptions since the Berne Convention and TRIPS — legitimate purpose, no conflict with normal exploitation, no unreasonable harm to the rights holder's interests. The Saudi Authority for Intellectual Property (SAIP), the regulator tasked with guiding, protecting, and enforcing IP rights in the Kingdom, must issue implementing regulations that will determine how strictly "limited to what meets the purpose" is policed in practice (SAIP).
The steelman: what creators actually lose
Rights holders have a real complaint, and it deserves to be stated plainly before it's dismissed. A novelist, journalist, or photographer whose lawfully published work ends up training a commercial foundation model receives nothing under Article 26 — no license fee, no royalty, no opt-out. The exception does not distinguish between a university research lab and a well-funded commercial AI company monetizing the resulting model. Nor does it address what happens once the training is done: whether an AI system's output, generated after ingesting a protected work, can itself infringe or constitute a derivative work is left unanswered, an omission that has already produced years of litigation in the United States and the EU. And "limited to what meets the purpose" is a proportionality standard, not a bright line — a company that copies an author's entire back catalogue to train a model can plausibly argue that scale was what "the purpose" required. Authors in smaller markets, who lack the bargaining leverage to negotiate licensing deals the way major publishers do with US labs, are the ones most exposed to this ambiguity.
Why the conditions are still the right instrument
That critique argues for tighter drafting and firm implementing regulations — not for scrapping the exception. The alternative real-world regimes are worse on both axes that matter: legal certainty and actual compensation. The EU's Digital Single Market Directive TDM exception requires rights holders to affirmatively opt out machine-readable rights reservations, which functions in practice as a compliance minefield for AI developers and has not produced meaningful payment flows to individual authors either. US fair-use litigation over AI training — still unresolved after multiple years of suits against major labs — has left developers there operating under genuine legal uncertainty, with outcomes turning on judge-by-judge interpretation rather than statutory text. Saudi Arabia's approach at least tells developers up front what conditions they must satisfy, and it gives SAIP a concrete hook — "limited to what meets the purpose" — to police overreach through enforcement rather than years of case law. Criminal penalties for copyright infringement generally were also quadrupled under the new law, with fines reaching SAR 1,000,000 and automatic doubling for repeat offenders, a sign the law is not simply deregulatory across the board (Baker McKenzie).
The Vision 2030 calculation
The timing is not incidental. Saudi Arabia has designated 2026 the "Year of Artificial Intelligence," a Cabinet-approved push tied to Vision 2030's goal of building an economy driven by data, compute, and homegrown AI models (Ministry of Communications and Information Technology; Arab News). The Kingdom's digital economy now contributes roughly 16% of GDP, and AI companies operating there secured about $9.1 billion in funding over the past year (MCIT; Arab News). A domestic AI sector cannot train large models without ingesting large volumes of text, and a copyright regime requiring individual licenses from every rights holder would have made that all but impossible on any reasonable timeline. Article 26 is the legal precondition for the industrial policy the Kingdom has already committed to.
The verdict
The honest read is that Article 26 shifts the cost of AI development from developers to authors, betting that proportionality conditions administered by SAIP can do the job a compensation mechanism would otherwise do. That is a defensible bet — narrower than blanket permission, more workable than the EU's opt-out regime, and more predictable than open-ended US litigation — but it is still a bet, and its fairness will be decided entirely by how strictly SAIP enforces "limited to what meets the purpose" once the implementing regulations land. A regulator that treats that phrase as real will have built a genuinely proportionate exception; one that treats it as a formality will have written a subsidy for AI companies into copyright law and called it a compliance standard.