
Saudi Arabia is reportedly making preparations to establish a $40 billion fund dedicated to investments in artificial intelligence (AI). According to The New York Times, this ambitious initiative could position Saudi Arabia as the world’s leading investor in AI. The plan, which may undergo modifications, is part of Saudi Arabia’s broader strategy to diversify its economy and expand its global influence through its sovereign wealth fund, currently valued at over $900 billion.
The Saudi Arabian Public Investment Fund has reportedly been in discussions regarding a potential partnership with Andreessen Horowitz, a prominent venture capital firm based in Silicon Valley. These discussions have focused on the role of Andreessen Horowitz within the proposed fund and its operational framework. The proposed $40 billion investment would exceed the typical amounts raised by US venture capital firms, second only to the startup investments of Japanese company SoftBank.
The global excitement surrounding artificial intelligence has led to a significant increase in valuations for both private and public companies. Investors are eager to discover or create the next NVIDIA or OpenAI. An example of this trend is Anthropic, a startup that has raised over $7 billion within just one year, an extraordinary achievement within the venture capital industry. The proposed Saudi tech fund is expected to further amplify this trend.
Financing AI projects can be a costly endeavor. Sam Altman, the CEO of OpenAI, has sought substantial financial support from the government of the United Arab Emirates to scale up the production of essential AI chips. The planned Saudi tech fund, with assistance from Wall Street banks, could make a significant contribution to these high-cost AI projects.