Saudi Arabia’s government plans to create a roughly $40 billion fund to put money into artificial intelligence, according to three people briefed on the plans, the most recent sign of a gold rush right into a technology that has already begun to change the way in which people live and work.
In recent weeks, officials with Saudi Arabia’s Public Investment Fund have discussed a possible partnership with Andreessen Horowitz, one in all Silicon Valley’s top enterprise capital firms, and other financiers, according to the individuals who weren’t authorized to speak publicly. They warned that plans should still change.
The planned technology fund would make Saudi Arabia the world’s largest investor in artificial intelligence. It would also showcase the oil-rich country’s global business ambitions, in addition to its efforts to diversify its economy and establish itself as a more influential player in geopolitics. The Middle Eastern nation pursues these goals through its sovereign wealth fund, which has assets of greater than $900 billion.
Saudi fund officials discussed the role that Andreessen Horowitz – already an lively artificial intelligence investor whose co-founder Ben Horowitz is friends with the fund’s chairman – could play and the way such a fund would work, the people said. The $40 billion goal would dwarf the standard amounts raised by U.S. enterprise capital firms and can be eclipsed only by SoftBank, the Japanese conglomerate that has long been the world’s largest investor in startups.
A Saudi tech fund being created with the assistance of Wall Street banks can be the most recent potential entrant right into a market already flush with money. The global artificial intelligence frenzy has sent valuations of personal and public firms soaring as investors race to find or construct the subsequent Nvidia or OpenAI. For example, the startup Anthropic raised greater than $7 billion in a single 12 months – a flood of cash virtually unheard of on the earth of enterprise capital.
The cost of financing AI projects is high. According to reports, Sam Altman, CEO of OpenAI he demanded an enormous sum from the United Arab Emirates government to increase production of chips needed to power AI technology.
Saudi Arabian officials have mentioned to potential partners that the country wants to support a spread of artificial intelligence technology startups, including chipmakers and expensive, expansive data centers that 4 people said are increasingly mandatory to power next-generation computers with knowledge of those efforts , who weren’t authorized to speak publicly. She even considered starting her own artificial intelligence firms.
Two of the people said Saudi Arabia’s latest investment push is probably going to gain momentum within the second half of 2024. A $40 billion fund could make each the Saudi government and Andreessen Horowitz key players within the race to acquire various businesses related to with this field.
Horowitz and Yasir al-Rumayyan, president of the Public Investment Fund, discussed the opportunity of the Silicon Valley company opening an office within the capital, Riyad, said one in all the people conversant in the talks.
Other enterprise capitalists may take part in the dominion’s technology fund, said two people briefed on the plans.
Partly due to its enormous financial strength and growing ambitions, representatives of international business circles closely monitor the activities of the Public Investment Fund, established in 1971.
In 2018, as Saudi Arabia was emerging as a top destination for investment firms and entrepreneurs looking for financial backing, the country’s agents killed Saudi journalist Jamal Khashoggi at the dominion’s consulate in Istanbul, a move that for a time appeared to damage the country’s fame amongst international financiers.
In 2022, the federal government of Saudi Arabia invested billions in an organization run by, amongst others, by former President Donald J. Trump’s son-in-law Jared Kushner, which was perceived by many as a political move. One recent deal to mix LIV Golf with the PGA Tour has drawn the ire of golfers, however the pact can be controversial, partly due to Saudi Arabia’s human rights record.
Saudi Arabia, which pumped $3.5 billion into Uber in 2016, is essentially combating technology investments. It donated $45 billion to SoftBank for the Japanese company’s $100 billion Vision Fund, which has been distributed to dozens of firms, including now-bankrupt real estate firm WeWork and other failed startups similar to robotic pizza-making company Zume.
Many in Silicon Valley and on Wall Street welcomed the nation back into the fold. During this 12 months’s Super Bowl, Horowitz hosted al-Rumayyan, according to two people briefed on their activities.
The two men hung out together before and after the sport, the people said, with Mr. Horowitz showing al-Rumayyan around Las Vegas, his adopted city, and introducing the investor to his friends within the music and sports worlds.
