Saudi Arabia plans $40B fund to invest in artificial intelligence
Saudi Arabia is reportedly preparing to set up a $40 billion fund dedicated to artificial intelligence (AI) investments. The New York Times reported that this ambitious move could position the Middle Eastern country as the world's top investor in AI. The plan, which may still undergo modifications, forms part of Saudi Arabia's wider strategy to diversify its economy and expand its global influence via its sovereign wealth fund, currently holding over $900 billion in assets.
Potential alliance with Silicon Valley powerhouse
Saudi Arabia's Public Investment Fund has reportedly been in talks about a potential alliance with Andreessen Horowitz, a prominent venture capital firm based in Silicon Valley. The discussions have revolved around Andreessen Horowitz's role within the proposed fund and how it would operate. The proposed $40 billion investment would far exceed the usual amounts garnered by US venture capital firms, coming second only to Japanese giant SoftBank's start-up investments.
Surge in company valuations amid AI investment boom
The worldwide buzz surrounding artificial intelligence has triggered a dramatic increase in valuations for both private and public companies. Investors are scrambling to discover or create the next NVIDIA or OpenAI. A case in point is Anthropic, a start-up that has raised over $7 billion within just one year—an almost unheard-of feat within the venture capital sector. The proposed Saudi tech fund is anticipated to further amplify this trend.
AI projects demand hefty investments
Financing artificial intelligence projects can be an expensive undertaking. OpenAI's CEO, Sam Altman, has sought significant financial backing from the United Arab Emirates government to ramp up production of essential chips for AI technology. The planned Saudi tech fund, which is being put together with help from Wall Street banks, could make a substantial contribution to such high-cost AI projects.
