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HomePIFSaudi Arabia’s $40B AI Ambition: A New Investment Powerhouse

Saudi Arabia’s $40B AI Ambition: A New Investment Powerhouse

Kingdom's Bold Leap into the AI Arena with Billion-Dollar Fund

March 20, 2024
in PIF, Technology
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Saudi Arabia is poised to make a significant entry into the artificial intelligence sector by creating a substantial investment fund valued at $40 billion specifically for AI start-ups. This initiative marks the kingdom’s strategic move to tap into a market that’s already saturated with substantial investments.

AI is the latest focus of Saudi Arabia’s Public Investment Fund [Getty]

The kingdom’s Public Investment Fund (PIF), with assets estimated at $925 billion, is currently in discussions with the Silicon Valley venture capital firm, Andreessen Horowitz, regarding this initiative.

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According to reports, the fund is targeted to be operational by the end of 2024, and its magnitude far surpasses current investment levels in the sector.

This $40 billion investment vehicle is expected to fuel advancements in artificial intelligence, microchip production, and sophisticated data storage solutions. It may also encourage Andreessen Horowitz to establish a presence in Riyadh and stimulate the formation of native AI start-ups within Saudi Arabia.

PIF governor Yasir al-Rumayyan and Andreessen Horowitz’s co-founder, Ben Horowitz, who share a rapport, recently discussed the potential of partnering to build an AI investment powerhouse. This alliance could propel both Saudi Arabia and Andreessen Horowitz to the forefront of the AI industry.

Artificial intelligence is rapidly becoming a transformative force across various industries and everyday life. However, the AI revolution has raised ethical concerns, including potential misuse by repressive regimes and the threat of widespread job displacement due to technological advancements.

In line with Crown Prince Mohammed bin Salman’s vision, Saudi Arabia aims to become a regional hub for high-tech industries, reducing its reliance on oil revenue. NEOM, an ambitious megacity project featuring ‘The Line’—a 170km linear city devoid of streets and cars—is expected to play a pivotal role in this technological leap, contingent on significant growth in the high-tech sector and extensive investments.

Marc Andreessen, another co-founder of Andreessen Horowitz, had a role in advising the NEOM project, showcasing the intricate ties between the venture capital firm and Saudi’s tech aspirations.

Saudi Arabia is also enticing regional investors to relocate their headquarters to Riyadh, with cutting-edge technological infrastructure being a key lure.

Given that AI is a capital-intensive field—highlighted by OpenAI’s pursuit of $7 trillion, including contributions from the UAE for enhancing chip production—Saudi Arabia’s PIF is not only expanding its AI investment but also diversifying with acquisitions such as Newcastle United football club and the potential takeover of national airline Saudia.

Tags: AI FundAndreessen HorowitzPublic Investment Fundsaudi arabiaStart-ups
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