Saudi Arabia Set to Invest $40B in AI Under a16z Oversight

Saudi Arabia plans to venture into AI through a massive investment move. The country's government intends to set up a $40 billion AI investment fund that could kick off by the second half of 2024.The investment fund will likely have a venture capital firm in Silicon Valley as its overseer.

Saudi Arabia to Take a Huge Step into AI with A $40 Billion Investment Fund

A March 19 New York Times report revealed that Saudi Arabia plans to partner with Silicon Valley's Andreessen Horowitz (a16z) to launch an AI investment fund, citing sources familiar with the matter.

The fund could start in the second half of 2024. However, the kick-off time could change based on certain twists.

While Saudi's Public Investment Fund (PIF) representatives are considering a16z to oversee the AI fund, other venture capitalists might also participate. An alliance between a16z and Saudi Arabia's government could nudge the firm into establishing an office in Riyadh, the country's capital.

The report noted that Ben Horowitz, the co-founder of a16z, is friends with the governor of PIF, Yasir Al-Rumayyan. Such ties could facilitate the partnership bid.Meanwhile, in line with its plan, Saudi Arabia will source its AI fund through the Kingdom's $900 billion sovereign wealth fund.

It also plans to invest in chip manufacturers and large data centers with high capacities for powering AI technology. Saudi Arabia has long pondered developing its own AI companies. If the $40 billion investment comes to fruition, Saudi Arabia will become the biggest AI investor.

But for now, Microsoft remains the largest AI investor, with over $13 billion invested in ChatGPT's creator, OpenAI, through a series of investment steps. However, this amount is significantly below half the value of the fund Saudi Arabi proposes for its AI advancement.

Additionally, the CEO of OpenAI, Sam Altman, reportedly sought a $7 trillion AI-support fund from the United Arab Emirates in February for advanced semiconductor chips. Saudi Arabia and a16z wanted to establish a possible collaboration following several discussions since April last year.

During an interview with WeWork's ex-CEO Adam Neumann in 2023, Horowitz applauded Saudi Arabia as a pro-startup company in contrast to the US, which is gradually losing its place in the startup sector.

.@a16z founders @bhorowitz and @pmarca spoke with Adam Neumann about Saudi Arabia at a Saudi-sponsored conference last week:

some takeaways:
- praised SA as a "startup country"
- "his royal highness" acts as SA's de facto "founder"
- US is slow, SA is fast pic.twitter.com/eUIM1ZN1cv

- This Week in Startups (@twistartups) April 5, 2023

Concerns Regarding Safety as AI Tech Continues to Proliferate

However, while some entities and countries are adopting AI technology, the associated risks remain a concern to humanity at large. In October 2023, US President Joe Biden ordered the implementation of new AI safety standards in the country.The new standards comprise six basic concepts to guide the AI industry, including plans for the ethical application of AI in the government.

Additionally, it lays out steps for consumer privacy protection.One of the implemented standards is the Defense Production Act. This measure demands certain levels of reporting of vital information from AI firms, such as AI safety test results, to the Department of Commerce.

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