In an ambitious push to become a key player in the field of artificial intelligence (AI), Saudi Arabia is reportedly establishing a massive investment fund. This fund, estimated to be worth around $40 billion, aims to propel the nation to the forefront of the technological revolution currently transforming global industries.
Insiders who have been briefed on the plans reveal that the Middle Eastern powerhouse is determined to leverage its substantial financial resources to make significant strides in AI. Over the past several weeks, conversations have taken place between representatives of Saudi Arabia’s Public Investment Fund and various financiers, including Andreessen Horowitz, a leading venture capital firm in Silicon Valley.
If realized, this investment would position Saudi Arabia as the world’s preeminent investor in AI, outstripping the capital typically raised by American venture capital firms. Several Wall Street banks are believed to be involved in structuring this colossal fund.
Currently, companies like Nvidia and OpenAI are at the vanguard of the AI sector, which necessitates substantial funding. For instance, OpenAI has been the beneficiary of a multibillion-dollar infusion from Microsoft. OpenAI’s chief, Sam Altman, is reportedly seeking to amass a staggering $5 to $7 trillion for a project aimed at expanding global chip-manufacturing capabilities, essential for AI advancement. Among the prospective backers is the government of the United Arab Emirates.
Fueled by its oil wealth, Saudi Arabia plans to draw from its sovereign wealth fund, which boasts assets exceeding $900 billion, to underpin its AI investment strategy. Discussions have even taken place regarding the possibility of Horowitz and Yasir al-Rumayyan, governor of the Public Investment Fund, establishing an office in Riyadh, the Saudi capital.
Related tickers: Notable companies in the technology sector that could be impacted by these developments include Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG/GOOGL), Super Micro Computer (SMCI), Advanced Micro Devices (AMD), Qualcomm (QCOM), Arm Holdings (ARM), and Amazon (AMZN).