Saudi Arabia plans to spend billions of dollars to become a global AI hub.
What's new: The desert kingdom has allocated $100 billion to invest in AI and other technologies, The New York Times reported. The massive potential outlay is attracting AI giants and startups alike.
How it works: Saudi Arabia, whose economy is based on large reserves of oil, aims to channel its considerable wealth into more sustainable industries. AI is a major target.
- The state-owned Public Investment Fund (PIF) established a subsidiary, Alat, that plans to invest $100 billion in technology broadly by 2030. Alat has joined with partners to commit as much as $200 million to security and surveillance and $150 million to fully automated manufacturing.
- PIF is negotiating to establish a $40 billion AI fund with Silicon Valley venture capital firm Andreessen Horowitz. The Saudi government also established GAIA, a $1 billion partnership with U.S. venture capital firm NewNative, to offer startups with seed funding and compute resources provided by Amazon and Google. GAIA-supported companies must register in Saudi Arabia and spend 50 percent of their investment in the country.
- In March, attendees at the third annual LEAP technology conference, held near the Saudi capital of Riyadh, inked more than $10 billion worth of technology deals. For instance, Amazon committed $5.3 billion to Saudi cloud computing infrastructure and AI training.
- The Saudi government spent considerable resources building an AI research hub at King Abdullah University of Science and Technology. The university has hired foreign AI researchers and arranged to buy more than 3,000 Nvidia H100 chips.
Behind the news: Where AI is concerned, Saudi Arabia is competing with the neighboring United Arab Emirates (UAE). In March, UAE member state Abu Dhabi established its own multibillion-dollar investment fund, MGX, which aims to secure deals in AI models, data centers, and semiconductors. One of MGX’s founding partners (and a cornerstone in the UAE’s AI efforts) is G42, a conglomerate with ties to the Emirati government that owns numerous AI research labs and other assets. G42 recently received $1.5 billion from Microsoft. Last year, it paid U.S. chip designer Cerebras an initial $100 million to build up to nine AI supercomputers.
Yes, but: Saudi investments have not always arrived on the expected schedule. Founders of startups that were promised GAIA funding have complained of delays and nonpayments. Moreover, U.S. partners such as Microsoft have drawn criticism for working with Saudi Arabia, which has been accused of violating human rights. The U.S. government blocked fulfillment of the King Abdullah University’s purchase of Nvidia chips because it may help researchers associated with the Chinese military to circumvent U.S. restrictions on the export of advanced semiconductors. Earlier this year, U.S.-based generative AI startup Anthropic rejected potential investment from PIF citing national security concerns.
Why it matters: AI is fast becoming a source of national power, and many countries are eager to build their capabilities. Saudi Arabia’s investment could go a long way toward building facilities and talent in a part of the world that has not been known for high tech. For the country itself, it could bring economic growth and geopolitical advantage. For foreign companies and talent, it’s an immense new source of funding to pursue valuable projects and gain practical experience.
We're thinking: We are happy to see AI hubs emerge around the world, especially in places that can provide more opportunities for people who live outside of established AI centers.