Saudi Arabia is reportedly eyeing a $40 billion investment in artificial intelligence (AI) as part of its efforts to diversify its economy from oil amid a growing emerging technology arms race.
According to a report by the New York Times, Saudi Arabia’s Public Investment Fund (PIF) has opened high-profile talks with U.S.-based venture capital firm Andreessen Horowitz to establish an AI-focused fund.
While details are still scarce, the fund is expected to support the development of local AI firms in the early stages of growth with a particular focus on generative AI. Saudi Arabia, keen to adopt a broad stance on AI, may extend the scope of the fund to support local AI chip manufacturing and the development of data centers.
The $40 billion fund is expected to power a new AI hub in the Gulf, with PIF governor Yasir Al-Rumayyan remaining mum over the participation of other VC firms. The New York Times report suggests that Andreessen Horowitz may set up shop in the Saudi capital of Riyadh in a show of commitment.
Persons with knowledge of the matter suggest that the negotiations for the $40 billion fund may be wrapped up before the end of the second quarter.
Saudi Arabia has been steadily increasing its investment in AI since mid-2023 to gain a first-mover advantage in the Gulf region. At the end of 2023, the oil-rich state splurged a fortune on Nvidia’s (NASDAQ: NVDA) AI chips to begin in-house AI development without U.S. and Chinese influence.
“We are fairly well positioned to be an AI hub outside of the U.S.,” said Al-Rumayyan. “AI will consume a lot of energy and we are the global leader when it comes to fossil fuel energy and when it comes to renewable energy.”
With nearly $1 billion in its purse, the PIF says it has the “political will” to hasten the pace of AI development in the country.
Already, the country has launched several initiatives, including a nationwide AI sensitization policy to deepen the talent pool while scoring wins in its attempt to localize a large language model (LLM) to “ensure cultural sensitivity and alignment with local values.”
Following the money
Since 2023, analysts have observed a significant spike in the flow of capital into emerging technologies in Saudi Arabia. VC firm Animoca Brands, seeking to expand into the Middle East, turned to Saudi Arabia as its first port of call, pledging to support local Web3 firms.
The country has since attracted blockchain firms to set up shop in the country and explore the technology’s various use cases. The influx of blockchain firms has laid the foundation for the banking regulator to explore the possibilities of a central bank digital currency (CBDC) with other agencies probing other applications for the technology.
In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.
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