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Saudi Arabia plans to invest $40 billion in artificial intelligence| GuyWhoKnowsThings

Saudi Arabia's government plans to create a fund of around $40 billion to invest in artificial intelligence, according to three people briefed on the plans – the latest sign of the gold rush toward a technology that has already begun to reshape the way where people live and work.

In recent weeks, representatives of Saudi Arabia's Public Investment Fund have discussed a possible partnership with Andreessen Horowitz, a top Silicon Valley venture capital firm, and other financiers, said the people, who were not authorized to speak. publicly. They warned that plans could still change.

The planned technology fund would make Saudi Arabia the world's largest investor in artificial intelligence. It would also showcase the oil-rich nation's global trade ambitions, as well as its efforts to diversify its economy and establish itself as a more influential player in geopolitics. The Middle Eastern nation is pursuing those goals through its sovereign wealth fund, which has assets of more than $900 billion.

Saudi fund officials have discussed the role that Andreessen Horowitz, who is already an active investor in AI and whose co-founder Ben Horowitz is a friend of the fund's governor, could play and how such a fund would work, the people said. The $40 billion target would dwarf typical amounts raised by American venture capital firms and would be eclipsed only by SoftBank, the Japanese conglomerate that has long been the world's largest investor in startups.

The Saudi tech fund, which is being formed with the help of Wall Street banks, will be the latest potential entrant into a field already awash with cash. The global frenzy around artificial intelligence has raised the private valuations and public companies as bullish investors race to find or build the next Nvidia or OpenAI. The start-up Anthropic, for example, raised more than 7 billion dollars in just one year: an avalanche of money practically unheard of in the world of venture capital.

The cost of financing AI projects is high. Sam Altman, CEO of OpenAI, has reportedly sought a huge sum of the United Arab Emirates government to boost the manufacturing of chips needed to power artificial intelligence technology.

Saudi representatives have mentioned to potential partners that the country is looking to back a number of tech startups linked to artificial intelligence, including chipmakers and the expensive, expansive data centers that are increasingly needed to power the next generation. computer science, according to four people. with knowledge of those efforts, who were not authorized to speak publicly. He has even considered starting his own artificial intelligence companies.

Two of the people said Saudi Arabia's new investment push is likely to take off in the second half of 2024. A $40 billion fund could make both the Saudi government and Andreessen Horowitz key players in the races to take over several companies related to the field.

Horowitz and Yasir al-Rumayyan, the governor of the Public Investment Fund, have discussed the possibility of the Silicon Valley firm setting up an office in the country's capital, Riyadh, said a person with knowledge of the talks.

Other venture capitalists could participate in the kingdom's technology fund, two people briefed on the plans said.

Partly because of its enormous financial influence and growing ambitions, those in international business circles closely follow the moves made by the Public Investment Fund, which was created in 1971.

In 2018, just as Saudi Arabia was becoming a major destination for investment firms and entrepreneurs seeking financial backing, the country's agents killed dissident Saudi journalist Jamal Khashoggi in the kingdom's consulate in Istanbul, in what for a time seemed like damage the nation's reputation among international financiers. .

In 2022, the Saudi government invested billions in a company led by former President Donald J. Trump's son-in-law, Jared Kushner, among others, which was seen by many as a political movement. One of his recent offers. merge your LIV Golf The upstart with the PGA Tour drew the ire of golfers, but the pact is also controversial in part because of Saudi Arabia's human rights record.

Saudi Arabia, which invested $3.5 billion in Uber In 2016, it has largely struggled with technology investment. It gave $45 billion to SoftBank for the Japanese company's $100 billion Vision fund, which was funneled into dozens of startups, including the now-bankrupt real estate firm WeWork and other failed startups, such as the robotics company Zume pizza manufacturing.

Many in Silicon Valley and Wall Street have welcomed the nation back into the fold. During this year's Super Bowl, Horowitz hosted al-Rumayyan, according to two people briefed on his activities.

The two men also spent time together before and after the game, the people said, and Horowitz gave him tours of Las Vegas, his adopted hometown, and introduced the investor to his music and sports friends.

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