Saudi Arabia plans to invest approximately $40 billion in the artificial intelligence (AI) industry. Major governments worldwide are racing to increase their investments to gain an edge in AI supremacy.
According to the New York Times and other sources, on the 20th, Saudi Arabia plans to establish a $40 billion fund to invest in AI. The launch is targeted for the second half of this year.
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is reportedly in talks with global venture capital (VC) firms such as Andreessen Horowitz. Andreessen Horowitz is considering setting up an office in Riyadh, Saudi Arabia’s capital.
Saudi Arabia is promoting Vision 2030, a medium to long-term development plan to escape from its oil-centric economic structure. As part of this plan, it continues to expand its investment in future technologies such as AI.
Yasir bin Othman Al-Rumayyan, the president of PIF, emphasized at the Future Investment Initiative (FII) conference held in Miami, USA, last month that “We are in a good position to become an AI hub outside the United States” and that “AI requires a lot of energy, and Saudi Arabia is a global leader in both fossil fuel energy and renewable energy fields.”
PIF is the world’s sixth-largest sovereign wealth fund, with $600 billion in assets under management. It is the key source of funding for the “Vision 2030” reform. Mohammed bin Salman, the de facto ruler of Saudi Arabia, is the board’s chairman.
Recently, governments worldwide have been pouring money into the AI market to preempt it. The Joe Biden administration in the U.S. has allocated $20 billion for AI in the federal budget proposal for the fiscal year 2025 (October 2024 to September 2025) submitted to Congress. China has set its budget for science and technology fields, including AI, at 10% higher this year, totaling 68.6 trillion yuan (approximately $9.5 billion).
Among European countries, France’s inter-ministerial AI committee recommended the government invest €5 billion ($5.4 billion) annually for the next five years, predicting that the annual economic growth rate could double with the development of generative AI technology. Italian Prime Minister Giorgia Meloni also announced plans to establish a €1 billion ($1.09 billion) investment fund to promote AI projects.
SoftBank in Japan is pushing to establish a $100 billion fund to nurture an AI semiconductor company that can compete with Nvidia. SoftBank plans to develop a company capable of mass-producing AI semiconductors while complementing ARM, a semiconductor design company with a 90% stake.
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