The PIF will invest in Virgin Galactic, The Spaceship Company and Virgin Orbit, the SPA said.
According to Virgin Group founder Richard Branson, the investment will enable the firm to develop the next generation of satellite launches and accelerate its programme for point-to-point supersonic space travel.
MEED understands the memorandum of understanding (MoU) signed between the two entities includes an option for $480m of future additional investment in space services.
Branson attended the Future Investment Initiative, organised by PIF, held last week in Riyadh.
The UK entrepreneur is one of the first international investors to commit to taking part in Saudi Arabia’s Red Sea Project, which involves the development of 50 islands and 200 kilometres of coastline.
Branson is also among the key figures who have expressed support for the development of the $500bn Neom scheme, a brand new city in the kingdom that will be built on 26,500 square kilometres of land and will connect to Jordan and Egypt.