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This Middle Eastern country is building a gigantic fund to invest in AI technology, potentially the biggest player in this booming market.
By Maureen Farrell and Rob Copeland
The Saudi government is setting up a fund of about $40 billion to invest in synthetic intelligence, according to three other people briefed on the task — the latest sign of the gold rush for a generation that has already begun to reshape the way other people live and work.
In recent weeks, representatives of the Saudi Public Investment Fund have discussed a possible partnership with Andreessen Horowitz, one of Silicon Valley’s top venture capital firms, and other financiers, said the sources, who had the right to speak publicly. They cautioned that the plans could simply still change.
The planned tech fund would make Saudi Arabia the world’s largest investor in synthetic intelligence. It would also highlight the oil-rich country’s global industrial ambitions, as well as its efforts to diversify its economy and identify itself as a more influential player in geopolitics. The eastern country pursues those goals with its sovereign wealth fund, which has assets of more than $900 billion.
Officials at the Saudi fund discussed the role of Andreessen Horowitz, who is already an active investor in A. I. and whose co-founder Ben Horowitz is a friend of the fund’s governor, and how such a fund would work, the sources said. The $1 billion target would dwarf the amounts raised through U. S. venture capital firms and be dwarfed only by SoftBank, the Japanese conglomerate that has long been the world’s largest investor in startups.
The Saudi technology fund, which is being created with the help of Wall Street banks, will be the potential new entrant in a sector that is already saturated with cash. The global frenzy around synthetic intelligence has raised valuations of public and private corporations as positive investors. rush to localize or build the next Nvidia or OpenAI. Startup Anthropic, for example, raised more than $7 billion in just one year, a virtually unprecedented amount of cash in the world of venture capital.
The cost of investing in AI projects is high. Sam Altman, CEO of OpenAI, has asked the UAE government for a huge sum of cash to boost the manufacturing of the chips needed to run AI technology.
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