In its latest manifestation of the stampede toward a technology that is already changing how people live and work, the Saudi Arabian government plans to set up a fund worth about $40 billion to invest in artificial intelligence. Three people briefed on the plans said this initiative represents a major step toward AI development in Saudi Arabia.
Saudi Arabia’s Public Investment Fund has discussed a possible partnership with one of Silicon Valley’s most powerful venture capital firms, Andreessen Horowitz. Such a collaboration could significantly enhance Saudi investment in AI technology, according to sources familiar with the discussions who spoke anonymously because they weren’t authorized to comment publicly.
The proposed tech fund would establish Saudi Arabia as the world’s largest investor in artificial intelligence, exemplifying this oil-rich country’s ambitions in international trade, economic diversification, and rising geopolitical influence. With over $900 billion in assets, this Middle Eastern nation is aggressively pursuing these goals through its sovereign wealth fund, which is crucial for AI development in Saudi Arabia.
Officials from the Saudi fund have elaborated on how this initiative might operate and how Andreessen Horowitz, already an active investor in AI, could play a pivotal role. This partnership would provide a substantial boost to Saudi investment in AI technology, positioning the kingdom at the forefront of the industry.
Wall Street banks are aiding in the construction of this Saudi tech fund, a new entrant into a lucrative market. Amid investor enthusiasm for identifying the next Nvidia or OpenAI, the global fixation on AI has driven the valuations of both private and public companies to new heights. For instance, the start-up Anthropic raised nearly $7 billion in a single year, underscoring the scale of Saudi investment in AI technology.
Funding AI projects will be very costly. Reports indicate that Sam Altman, the CEO of OpenAI, has sought large sums from the United Arab Emirates government to increase production of the chips that drive artificial intelligence. In much the same way, AI development in Saudi Arabia requires substantial capital investment.
Saudi officials have expressed keen interest in funding various AI-related tech start-ups, including chip manufacturers and large data centers essential for next-generation computing. They are also reportedly considering launching their own artificial intelligence businesses, emphasizing a commitment to keep Saudi investment in AI technology within the kingdom.
According to two individuals, the autumn of 2024 is likely when Saudi Arabia’s new investment push will gain momentum. With a $40 billion fund, the Saudi government and Andreessen Horowitz could emerge as major players in the competitive AI landscape, significantly influencing AI development in Saudi Arabia.
There has also been discussion about the possibility of establishing an office for Andreessen Horowitz in Riyadh, the nation’s capital. This step would be instrumental in laying the foundations for AI development in Saudi Arabia and attracting more international partners.
The Public Investment Fund, established in 1971, is closely monitored due to its vast financial power and rapidly evolving goals, particularly concerning Saudi investment in AI technology.
Despite a tarnished reputation following the killing of dissident journalist Jamal Khashoggi in 2018, Saudi Arabia is emerging as a significant destination for investment firms and entrepreneurs seeking financial support in technology, especially in AI.
In 2022, the Saudi government invested billions of dollars in a firm involving Jared Kushner, son-in-law of former President Donald J. Trump. This deal exemplifies the complexities of Saudi investment in AI technology and its broader implications for international relations.
Although Saudi Arabia has historically struggled with technology investments, including a $3.5 billion investment in Uber in 2016 and a $45 billion commitment to SoftBank’s Vision Fund, the current initiative marks a new trend in AI development in Saudi Arabia.
The kingdom’s interest has captured attention across Wall Street and Silicon Valley. Recent interactions between Horowitz and al-Rumayyan during high-profile events, such as the World Cup and Super Bowl, illustrate the growing engagement and potential for significant Saudi investment in AI technology.
