Saudi Arabia Establishes a $40 Billion Fund Dedicated to Investing in Artificial Intelligence

The Kingdom of Saudi Arabia announced its intention to launch a $40 billion investment fund dedicated to artificial intelligence, in partnership between the Public Investment Fund and several major American technology companies, as revealed by officials at the Davos conference.

This initiative is classified as one of the largest AI funds in the world, and its investments will be directed toward funding startups in this sector and building computing infrastructure and data centers within the Kingdom.

This step comes in the context of intense regional competition between Saudi Arabia and the UAE to lead the artificial intelligence landscape in the Middle East, as the UAE recently announced similar investments in this sector.

The Kingdom includes this initiative within Vision 2030 aimed at diversifying income sources away from oil, with aspirations to raise the digital economy's contribution to GDP to 19% by 2030. Analysts believe that Saudi Arabia possesses unique capabilities to build a regional AI hub, including massive capital, a strategic geographical location, and cheap electrical energy.

What Do These Terms Mean?

Sovereign Wealth Funds: Investment funds owned by governments and funded by national wealth surpluses such as oil revenues. The Saudi Public Investment Fund is one of the largest globally, with assets exceeding $900 billion.

Computing Infrastructure: The equipment and systems needed to run artificial intelligence, including servers, processing chips, data centers, and high-speed networks. Building it costs billions, but it is an essential prerequisite for progress in this sector.

Vision 2030: The economic diversification plan launched by Crown Prince Mohammed bin Salman in 2016, aiming to reduce reliance on oil by developing the tourism, entertainment, technology, and manufacturing sectors.