Saudi Arabia is moving with remarkable resolve and enormous resources towards its stated goal of becoming a global leader in the f ield of artificial intelligence. Over the past few years, a variety of initiatives were introduced—from new government bodies to investment vehicles to R&D and startup support programmes.
These efforts are reflected by the kingdom’s emergence in several international AI-related rankings. In the 2023 Tortoise classification, which covers 60 countries, Saudi Arabia claimed the top position for its AI Government Strategy and earned a spot in the top 20 for its infrastructure and operating environment. That same year, Stanford University’s International AI Index noted the Saudi Arabian public was among the most positively minded in the world about artificial intelligence.
PIONEERING STARTUPS
Artificial intelligence is not entirely new in Saudi Arabia. The past decade saw the emergence of a first generation of locally-based startups involved in AI developments. Among them were Lucidya, founded in 2015, with its AI-powered customer experience management software; Mozn, established in 2017, offering solutions to enhance risk intelligence and compliance processes, as well as Arabic NLP products; and Tachyon, launched that same year, whose cloud platform uses blockchain and machine-learning (ML) algorithms to optimise transport and logistics operations. (As of July 2024, Tracxn identified 116 Saudi startups in the AI realm.)
The government’s first major action occurred in 2018 when Saudi Arabia pledged $45 billion—yes, billions, not millions—to SoftBank’s Vision Fund. Primarily, though not exclusively, focused on AI, this massive global technology fund has invested in notable companies such as Arm, Automation Anywhere, Cruise, and Nvidia.
But Saudi Arabia has stopped seeing itself merely as a source of funding. It now seeks to build its own tech industry, backing local ventures and requiring international companies to operate within the country.
In 2019, the government established the Saudi Data and Artificial Intelligence Authority (SDAIA). This organisation describes itself as “the national authority on all matters related to the organisation, development and management of data and AI.”
THE RUSH
Over the past two years, Saudi Arabia’s efforts to build a domestic AI industry dramatically intensified. In May 2023, in collaboration with New Native, a US-based AI business and technology platform, the authorities launched GAIA, promoting it as a world-class generative AI startup accelerator. The initiative set an ambitious goal of establishing 300 AI companies within 36 months. The first batch attracted entrepreneurs and startups from various countries, including Taiwan, South Korea, Sweden, Poland and the United States, according to media reports. All participants were required to register a legal entity in the kingdom and allocate 50% of their investment locally.
Less than a year later, the Saudi government raised the stakes, announcing an additional $1 billion injection into the GAIA ecosystem, while New Native unveiled plans to create a $100 million fund to support AI startups across the region.
The next month, The New York Times revealed the Saudis’ intention to launch, in partnership with Andreesen Horowitz, a $40 billion investment fund dedicated to AI technologies. Far above the typical amounts raised by US venture capital firms, this vehicle would position Saudi Arabia’s sovereign wealth fund, PIF, as a major force in the global AI industry.
BET ON EDUCATION AND RESEARCH
Saudi Arabia is likewise committed to fostering AI in its education system. The Ministry of Education’s automation and technology programme has trained over 30,000 students in AI and programming principles in recent years, according to SDAIA.
Furthermore, since 2023, the King Abdulaziz Scholarship Program has helped young Saudis study AI at premier international universities. AI expert Abdo Farouk Al-kattan told WEJ that more than 5,000 Saudis were to study AI-related disciplines at institutions such as MIT, Stanford and Cambridge. The plan started in 2023 and is still ongoing.
King Abdullah University of Science and Technology (KAUST), Saudi Arabia’s leading research institution, is drawing foreign AI experts and offering computing resources to establish itself as a major hub for AI research. To lead its AI programme, the university has recruited Jürgen Schmidhuber, a prominent figure in the global AI research community.
The King Abdullah International Medical Research Center (KAIMRC) is utilising AI to analyse medical data and develop innovative treatment solutions. This organisation says it has published over 200 scientific papers on AI and medical technology and invested around $100 million in related R&D over the past three years.
TOP AI GOVERNMENT FUNDING ACROSS THE WORLD
- According to AIPRM, the US stands number one in government funding for AI, with almost $328 billion spent over five years (2019-23). A 2019 Executive Order established the ‘American AI Initiative’ with the stated goals of promoting “American Innovation, American Industry, the American Worker, and American Values.” The next year, the Congress passed the National AI Initiative Act, allocating substantial funding to support AI research, education and standardisation.
- In China—number two in terms of government funding with some $195 billion in 2019-23, according to AIPRM — a national AI Development Plan aims to turn the country “into a major global AI innovation centre” by 2030. The scale of its AI core industry is expected to exceed one trillion yuan (approximately $141 billion) with the related industries surpassing 10 trillion yuan, according to official sources.
- The European Union also wants to become a world-class hub for AI. Focusing on AI research, innovation and ethics, the EU’s AI Strategy, adopted in 2018, aims to invest €20 billion annually between 2020 and 2030. In 2021, the Commission’s AI package focused on fostering a coordinated European approach to AI, and developing regulatory and impact assessment frameworks. Additionally, in January 2024, the Commission launched an AI innovation package in support of startups and SMEs.
VITAL TO INDUSTRY DEVELOPMENT
The Saudi government sees AI as a cornerstone of ‘Vision 2030,’ the country’s grand strategy to reduce dependency on oil and diversify the economy. “Out of 96, 66 of the direct and indirect goals of Vision 2030 are related to data and AI,” says the SDAIA.
Many of the kingdom’s technology-related programmes feature a key AI component. One example is NEOM, the mega-city project that aims to build a beacon of technology and sustainability in the middle of the desert. In October 2023, the NEOM Investment Fund (NIF) announced a $100 million investment in Pony.ai, a California-based autonomous driving company, and a joint venture to develop, manufacture and deliver autonomous vehicles in the region.
Saudi tech entrepreneur Ahmed Yusuf believes AI is “poised to revolutionise NEOM’s infrastructure management, from optimising energy distribution and waste management to enhancing transportation systems.” AI could also optimise construction designs, help manage logistics, and contribute to achieving NEOM’s sustainability goals through optimised renewable energy management and stronger environmental monitoring.
AI is also assigned a significant role in Alat, a brand-new firm which plans to invest $100 billion of PIF money in next-gen industrial ventures. Headquartered in Riyadh, the company is betting on AI Infrastructure to support “smart manufacturing, sustainable and energy-efficient computing,” and aims to integrate AI with Industry 4.0 technologies.
LURING FOREIGNERS
In their rush to assert their power on the global tech map, the Saudis still need foreign talents and technologies. Microsoft, Google Cloud and Amazon are working hard to develop Saudi Arabia’s cloud computing infrastructure. In March 2024, AWS announced a $5.3 billion investment in a region-wide project, two new innovation centres, and training programmes for local students and developers.
That same month, a myriad of tech executives, engineers and sales representatives from the world’s largest tech firms rushed to a giant tech conference called Leap, held in the desert, 80km away from Riyadh.
Presented by some as a ”digital Davos,” the event drew some 200,000 people and generated $10 billion worth of deals, according to Saudi Arabia’s state press agency. IBM CEO Arvind Krishna mentioned a “lifetime friendship” with the kingdom, while TikTok CEO Shou Chew heralded his app’s growth in the kingdom and shared his intentions to “invest even more,” reported The New York Times.
US-CHINA CONFRONTATION
The growing foreign attention to Saudi Arabia’s technology sector goes beyond mere business considerations. The kingdom is also emerging as a site in the US-China technology confrontation.
Alat’s $200 million joint venture with Chinese Dahua Technology is also under US scrutiny
KAUST has alarmed US officials when it attracted Chinese students and professors and launched partnerships with Chinese research institutions. “More than a dozen students and staff members at Kaust are from military-linked Chinese universities known as the Seven Sons of National Defence,” according to a review by The New York Times. The US believes these students and professors will “use Kaust to sidestep US sanctions and boost China in the race for AI supremacy.”
The university’s supercomputer development program is also viewed with suspicion, as it may necessitate purchasing $100 million worth of valuable microchips from Nvidia, the US-based AI computing giant. Announced in February 2024, Alat’s $200 million joint venture with Chinese Dahua Technology is also under US scrutiny. A global leader in video-centric AIoT solutions—including surveillance devices,—Dahua intends to develop its first overseas manufacturing facility in Saudi Arabia.
The US is concerned that this or other projects in the region could be exploited by Beijing to gain access to technology that Chinese firms are restricted from purchasing from the US.
Bloomberg reported that US off icials warned their Saudi counterparts that they would need to choose between Chinese and American technology as they advance Saudi Arabia’s semiconductor industry.
Alat CEO Amit Midha said his company would divest from projects involving China if it were asked to do so by the United States.
“So far, the requests have been to keep manufacturing and supply chains completely separate, but if the partnerships with China would become a problem for the US, we will divest,” Bloomberg quoted him as saying.
By Hisham Allam in Cairo and Adrien Henni in Paris
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