Saudis plan $40B push
The government of Saudi Arabia plans to create a fund of about $40 billion to invest in artificial intelligence, according to three people briefed on the plans — the latest sign of the gold rush toward a technology that has already begun reshaping how people live and work. In recent weeks, representatives of Saudi Arabia’s Public Investment Fund have discussed a potential partnership with Andreessen Horowitz, one of Silicon Valley’s top venture capital firms, and other financiers, said the people, who were not authorized to speak publicly. They cautioned that the plans could still change.
The planned tech fund would make Saudi Arabia the world’s largest investor in artificial intelligence. It would also showcase the oil-rich nation’s global business ambitions as well as its efforts to diversify its economy and establish itself as a more influential player in geopolitics. The Middle Eastern nation is pursuing those goals through its sovereign wealth fund, which has assets of more than $900 billion.
Officials from the Saudi fund have discussed the role Andreessen Horowitz — already an active investor in AI and whose cofounder Ben Horowitz is friends with the fund’s governor — could play and how such a fund would work, the people said. The $40 billion target would dwarf the typical amounts raised by U.S. venture capital firms and would be eclipsed only by Softbank, the Japanese conglomerate that has long been the world’s largest investor in startups.
The Saudi tech fund, which is being put together with the help of Wall Street banks, will be the latest potential entrant into a field already awash in cash. The global frenzy around artificial intelligence has pushed up the valuations of private and public companies as bullish investors race to find or build the next Nvidia or Openai. The startup Anthropic, for instance, raised more than $7 billion in one year alone — a flood of money virtually unheard-of in the venture capital world. The cost of funding AI projects is steep. Sam Altman, chief executive of Openai, has reportedly sought a huge sum from the United Arab Emirates government to boost manufacturing of chips needed to power AI technology.
Saudi representatives have mentioned to potential partners that the country is looking to back an array of tech startups tied to artificial intelligence, including chipmakers and the expensive, expansive data centers that are increasingly necessary to power the next generation of computing, according to four people with knowledge of those efforts, who were not authorized to speak publicly. It has even considered starting its own AI companies.
Two of the people said that Saudi’s new investment push is likely to take off in the second half of 2024. A $40 billion fund could make both the Saudi Arabian government and Andreessen Horowitz key players in races to corner various businesses related to the field.