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Saudi Arabia Plans to invest $40 billion in Artificial Intelligence

Jul 11, 2024 | News | 0 comments

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The kingdom of Saudi Arabia is all set to become the world’s largest AI investor with a new $40 billion fund, as per Saudi Arabia’s Public Investment Fund.

Artificial Intelligence Update: The Middle Eastern nation is setting up a massive fund to invest in artificial intelligence (AI) technologies to enter the hot market as the most significant player. In this race, the Saudi Arabian government intends to set up a $40 billion fund for AI investments. By doing so, the nation will become the world’s largest AI investor in the meantime.

Reportedly, officials of Saudi Arabia’s Public Investment Fund have been discussing a possible relationship with Andreessen Horowitz, one of the leading venture capital firms in Silicon Valley, and other financiers in recent weeks. They issued a warning, saying that plans can still change. The fund, powered by the Saudi government, will invest in AI startups and the related technology, including chips and data centres, necessary to power the AI revolution.

With the proposed tech fund, Saudi Arabia would become the largest global investor in AI It would also highlight the oil-rich country‘s aspirations in international trade and economic diversification and position itself as a more significant participant in geopolitics. With more than $900 billion in assets, the Middle Eastern country works toward these objectives through its sovereign wealth fund.

According to an article published in The New York Times, “Officials from the Saudi fund have discussed the role Andreessen Horowitz—already an active investor in AI and whose co-founder Ben Horowitz is friends with the fund’s governor—could play and how such a fund would work, the people said.”

Large language models require enormous financial resources to develop and train, but with OpenAI’s success, investors are willing to support businesses that are doing so. According to
AIM Research, U.S. funding for AI startups increased from $22.7 billion in 2022 to $36.7 billion in 2023.

A $40 billion Saudi fund would be more than the average sums raised by companies making AI investments. The Kingdom of Saudi Arabia has already contributed $45 million to SoftBank‘s billion-dollar Vision Fund, which is intended for technology company investments. Several AI startups have received funding from SoftBank’s Vision Fund, including the self-driving car startup Cruise, the RPA Software Developer Automation Anywhere, and the chipmakers Arm and Nvidia.

Additionally, Saudi Arabia wants to expand its own AI industry. Several AI businesses are currently based there, and initiatives to advance the nation’s use of data and AI as early as 2020 have started. Among them are Thya Technology, which offers computer vision solutions, and Lucidya, which provides AI-powered software for customer experience management.

Not only this, but Saudi Arabia came into the world’s limelight as it is investing in AI as part of its efforts to diversify its revenue streams and wean itself off of its reliance on oil. Saudi Arabia has invested in a number of companies recently, including the English soccer team Newcastle United, Uber, Lucid Motors, a high-luxury electric vehicle manufacturer, and Jio, an Indian telecommunications company.

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Written by Riteshu Sen Jaiswar

Chief Of Media at BIZBoost || Public Speaker || Web 3 Junkie || Passionate Writer || Gyaan Seeker

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