 "Saudi Arabia plans $100 billion AI powerhouse to rival UAE tech hub")
By Dinesh Nair, Matthew Martin and Ed Ludlow
Saudi Arabia is planning a new artificial intelligence project with backing of as much as $100 billion as it seeks to develop a technological hub to rival the neighboring United Arab Emirates, people familiar with the matter said.
The state-backed entity will invest in data centers, startups and other infrastructure to develop artificial intelligence, the people said, asking not to be identified discussing plans that aren’t yet public. The initiative, called “Project Transcendence,” will also focus on recruiting new talent to the kingdom, developing the local ecosystem and encouraging tech companies to put resources in the country, they said.
Such a company would build on the already massive efforts that Saudi Arabia has made to establish itself as a global force for AI development. It would be set up with a structure similar to Alat, a fund focused on sustainable manufacturing and backed by $100 billion in capital from the kingdom’s Public Investment Fund, the people said. Alat is chaired by Crown Prince Mohammed bin Salman and seeks to co-invest with large, international companies.
The Saudi government did not immediately respond with a request for comment.
An AI hub being built by Saudi Arabia’s PIF and Alphabet Inc.’s Google may serve as the starting point for a broader initiative, the people said. The companies are planning to invest between $5 billion and $10 billion in the partnership, which will include work on creating Arabic language AI models, one person said. Alphabet shares gained 4 per cent on Wednesday to $176.51.
Project Transcendence would aim to team up with large, established tech companies, with the Saudis offering help with infrastructure and capital, the people said. Ultimately, the amount invested could be $50 billion to $100 billion, they said.
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The project may ultimately include multiple government bodies and will be aimed at funding AI infrastructure and startups, as well as bridging the kingdom’s gap with the US and China on AI expertise, one of the people said.
Saudi officials have told others that the kingdom is envisioning an AI entity that would be a national champion, at least as big as Abu Dhabi’s G42 tech conglomerate, according to people familiar with the talks.
AI is part of Saudi Arabia’s Vision 2030 strategy, which aims to identify new revenue sources as the Gulf state diversifies away from fossil fuels. Its goal is to become a top 15 country in AI by spending the rest of this decade adopting the technology at home and then exporting it from 2030. The kingdom has launched major research centers and ministries devoted to AI and produced large-language models similar to OpenAI’s ChatGPT.
Still, one of the Crown Prince’s other mega-projects, the trillion-dollar Neom development, is facing funding cutbacks as the kingdom projects years of budget deficits, Bloomberg News has reported.
PIF was separately in early talks to partner with venture capital giant Andreessen Horowitz on a fund, which may grow to as large as $40 billion in commitments, to target artificial intelligence investments, people familiar with the matter said in March. The PIF aimed to initially run the new fund and would be among investors contributing to it, the people said, asking not to be identified discussing private information.