Saudi Arabia is making a bold move to position itself at the forefront of the artificial intelligence (AI) revolution. According to a report by the New York Times, the oil-rich nation is reportedly planning to create a massive $40 billion fund dedicated to investing in AI technology, according to three people briefed on the plans.
The Middle Eastern country's Public Investment Fund, which boasts assets exceeding $900 billion, has been in discussions with leading Silicon Valley venture capital firm Andreessen Horowitz and other financiers to explore potential partnerships for this endeavor. However, the sources, who spoke on condition of anonymity, cautioned that the plans are not yet finalized and could be subject to change.
If realized, the proposed tech fund would catapult Saudi Arabia to the top spot among global investors in AI. The $40 billion target would eclipse the typical amounts raised by U.S. venture capital firms, with only Japan's SoftBank surpassing it in terms of startup investment scale.
This move is not only a testament to the kingdom's ambitious plans to diversify its economy beyond oil but also a strategic step to establish itself as a more influential player on the global stage. "The planned tech fund would make Saudi Arabia the world's largest investor in artificial intelligence," one of the sources told The New York Times.
The Saudi fund's representatives have been in talks with Andreessen Horowitz, whose co-founder Ben Horowitz shares a friendship with the fund's governor, to discuss the potential role the firm could play and the operational aspects of such a fund. Wall Street banks are also lending their expertise to help structure this massive investment vehicle.
The global AI frenzy has already driven up valuations of both private and public companies, with investors eagerly seeking to back the next big players in the field, such as Nvidia or OpenAI. Startups like Anthropic have managed to raise staggering amounts – over $7 billion in just one year – highlighting the unprecedented level of funding pouring into the AI sector.
However, the cost of financing AI projects is substantial. OpenAI's CEO, Sam Altman, has reportedly approached the United Arab Emirates government for a significant sum to support the manufacturing of chips necessary to power AI technology.