Saudi Arabia Plans $40B Investment in AI

The Saudi Arabian government is looking to AI as its next investment opportunity. 

After splurging on sports teams and stakes in companies like Uber, the country is to invest $40 billion in AI.

According to The New York Times, representatives from Saudi Arabia’s Public Investment Fund held discussions with Silicon Valley venture capital firm Andreessen Horowitz regarding a potential partnership.

Developing and training large language models requires huge financial resources and investors are eager to back companies building them following the success of OpenAI. AIM Research findings show AI startup funding in the U.S. grew from $22.7 billion in 2022 to $36.7 billion in 2023.

A $40 billion Saudi fund would surpass standard amounts raised by firms investing in AI.

OpenAI rival Cohere recently held talks to raise up to $1 billion. Claude developer Anthropic secured a $4 billion investment from Amazon. And Elon Musk’s xAI believes it needs up to $6 billion to compete with OpenAI.

Andreessen Horowitz is no stranger to backing AI startups. Its portfolio includes synthetic voice firm ElevenLabs, data platform company Databricks and health care-focused Hippocratic AI. 

The Kingdom of Saudi Arabia has already contributed $45 million to SoftBank’s billion-dollar Vision Fund, dedicated to investing in technology firms. SoftBank’s Vision Fund has backed several AI companies, including chipmakers Arm and Nvidia, RPA software developer Automation Anywhere and self-driving car company Cruise.

Related:AI is Booming in the Middle East

Saudi Arabia is also looking to grow its own AI market. After initiating efforts to improve the country’s use of AI and data as far back as 2020, it is now home to several AI startups. Among them are Lucidya, which offers AI-powered software for customer experience management and Thya Technology, which provides computer vision solutions service.

Saudi Arabia has also attracted the attention of major cloud service providers so local organizations can host AI applications using data centers in the Kingdom.

AWS recently announced the launch of a dedicated infrastructure region in Saudi Arabia after the Leap 2024 technology conference. Both Microsoft and Google Cloud expanded cloud services there last year. 

Saudi Arabia’s AI investments come as the country is looking to diversify its income sources away from its dependency on oil. Among its investments in recent years, Saudi Arabia has acquired English soccer team Newcastle United, along with stakes in Uber, luxury electric vehicle manufacturer Lucid Motors and Indian telecommunications firm Jio.

Related:Saudi Arabia’s king approves national artificial intelligence strategy