In a bold move to position itself at the forefront of technological modernization, Saudi Arabia has announced the creation of a mammoth $40 billion investment fund dedicated to Artificial Intelligence (AI). This ambitious initiative aims to propel Saudi Arabia into the global tech arena and represents a strategic leap towards its Vision 2030 agenda, which seeks to diversify the country’s economy beyond oil.
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is seeking to explore the thriving AI industry in a possible partnership with American venture capital firm Andreessen Horowitz. This VC firm has $35 billion in assets under management and a track record of backing successful companies including Airbnb, Coinbase, and Facebook. Co-founder Marc Andreessen late last year said, “The threat of not aggressively pursuing global AI dominance… is considerable.”
The development and training of large language models requires huge financial resources and investors are eager to back companies building them following the massive success of OpenAI’s ChatGPT. In fact, AI startup funding in the US grew from $22.7 billion to $36.7 billion between 2022 and 2023.
The massive investment would thrust Saudi Arabia into competition with global heavyweights such as China, the US, and Europe in an escalating race to harness AI’s transformative potential in fields ranging from healthcare to autonomous weapons. Moreover, it would act to push the country away from its heavy reliance on oil revenues, aligning with its other considerable investments into sports teams, and global companies like Uber and Tesla.
Saudi Arabia is also looking to grow its domestic AI market. The country is now home to several AI startups and is seeking to spur homegrown talent and take advantage of its young, tech-savvy population. Furthermore, the kingdom has attracted the attention of major cloud service providers, so local organizations can host AI applications using data centers within the country. Both Microsoft and Google Cloud expanded cloud services there last year.
Written by Rakan Pharaon
