In the latest indication of the rush into a technology that is starting to alter how people live and work, the Saudi government intends to set up a $40 billion-plus fund to invest in artificial intelligence, three sources familiar with the plans said.
Saudi Arabia made the bold move of committing $40 billion over ten years in investing in artificial intelligence (AI) in the effort to place the country as one of the top tech powers globally. It aims to establish the digital infrastructure for the Kingdom as well as the diversification of the economy away from the current dependence on oil.
During a Riyadh technology symposium, Crown Prince Mohammed bin Salman addressed and announced that AI has the ability to revolutionize various industries like healthcare, education, and energy. “This investment reaffirms our promise to spur innovation and position Saudi Arabia as a hub for research and technology,” he said.
As per sources, who were prohibited from making detailed comments, officials of the Public Investment Fund of Saudi Arabia have spoken over potential collaboration with Andreessen Horowitz, a large Silicon Valley-based venture capital firm, as well as with other investors in the past few weeks. They made a warning that arrangements remain subject to revision.
Saudi Arabia would be the largest investor in artificial intelligence through the planned tech fund. It would also be a demonstration of oil-rich Saudi Arabia’s ambitions for international trade, economic diversification, and increased geopolitical influence. With its over $900 billion assets, the Middle Eastern country is pursuing those objectives through its sovereign wealth fund.
Saudi officials have talked about how such a fund would be structured and what part Andreessen Horowitz, which is itself an A.I. active player and whose co-founder Ben Horowitz knows the governor of the fund, could play, the sources said. SoftBank, the Japanese company that has been the global leader in start-up investment for years, would surpass the $40 billion figure, which would be well above the average levels raised by U.S. venture capital companies.
The money will be utilized to fund research center construction, local AI talent development, and collaboration with top international tech companies. Furthermore, through the establishment of an innovation culture and technological progress, the program will facilitate AI startups and entrepreneurs.
The experts are of the opinion that this investment will raise the living standard of Saudi citizens, speed up economic growth, and improve public services. The government will introduce several pilot projects that will include AI-learning platforms, self-running healthcare systems, and intelligent cities.
Wall Street banks are guiding the Saudi tech fund, which will be the ultimate and the last possible mover into a successful business. As wide-eyed investors scramble to find or create the next OpenAI or Nvidia, global mania about AI has taken private and public company valuations to the stratosphere. To put things into perspective, start-up Anthropic in merely a year of fundraising raised almost $7 billion, which is huge money close to record-breaking sizes for the venture-capital game.
A significant amount is spent on financing AI projects. OpenAI Chief Sam Altman, according to reports, met with the United Arab Emirates government in order to seek a huge amount in an effort to produce more chips for artificial intelligence in large numbers.
Saudi officials have made prospective partners aware that the kingdom is interested in supporting an array of tech start-ups specializing in artificial intelligence matters, from makers of semiconductors to the high-cost, monster-sized data centers that are more and more essential to power the future of computing, four people briefed on such plans who weren’t authorized to speak publicly added. It even explored opening up its artificial intelligence companies.
It is during the latter half of 2024 that Saudi Arabia’s new investment campaign will most probably pick up speed, the sources say. With a $40 billion fund, the Saudi government and Andreessen Horowitz might be among the leaders in the competition to buy other companies in the sector.
Mr. Horowitz and Yasir al-Rumayyan, the Public Investment Fund’s governor, discussed that the Silicon Valley company can set up an office in Riyadh, the nation’s capital, the people who knew about the negotiations said.
Mr. Horowitz and Yasir al-Rumayyan, the Public Investment Fund governor, also spoke on how the Silicon Valley company may have an office in Riyadh, the capital, the people involved in the negotiations said.
Two individuals familiar with the plans stated that other venture capitalists would contribute to the technology fund of the kingdom.
The Public Investment Fund was established in 1971 and is widely followed by those in international business communities, partly due to its massive financial influence and increasing ambitions.
When Saudi operatives killed dissident journalist Jamal Khashoggi within the kingdom’s Istanbul consulate in 2018, the country’s reputation with overseas financiers appeared to suffer in the short term. It was roughly around the same time Saudi Arabia was becoming a top choice for investment managers and dealmakers looking for access to financial sponsorship.
It was viewed by many as political in nature the 2022 billion-dollar investment the Saudi government made in Jared Kushner’s son-in-law owned company. Golfers were angry over one of its recent mergers to merge its LIV Golf startup with the PGA Tour, but the merger is also suspect partly due to Saudi Arabia’s human rights record.
Saudi Arabia has had a largely poor ability to invest in technology, even though it had previously invested $3.5 billion in Uber back in 2016. It invested $45 billion in SoftBank in return for the Japanese company’s $100 billion Vision fund, which it used to invest in dozens of firms, including now-bankrupt real estate company WeWork and other collapsed start-ups, like Zume, a robotics pizza start-up.
The country has been greeted by many individuals on Wall Street and Silicon Valley. Mr. al-Rumayyan was taken to the Super Bowl this year by Mr. Horowitz, two individuals who are close to their actions have reported.
In Conclusion
The Vision 2030 plan by Saudi Arabia plans to develop sustainable growth and diversify the economy. For becoming a leader of the tech revolution, the nation is investing in artificial intelligence strategically. The initiative, according to business analysts, will give a knowledge economy through the attraction of talent and foreign investment. Saudi Arabia will be in a position to be at the world’s forefront in AI development and shaping future innovation and economic influence with this ambitious initiative.
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