Saudi Arabia just stepped up plans to court the world’s AI leaders to its desert kingdom

In recent months, Saudi Arabia has hosted a flurry of high-profile events, leaders, and dealmaking from the AI world. It’s a sign that the country is serious about stepping up its plans to make its desert kingdom a top destination for AI companies in search of capital and opportunities.

Last week, for instance, the country held the third edition of the Global AI Summit, which debuted in 2020. This year’s showcase featured speakers from top AI companies in the West, such as Nvidia, Qualcomm, Google, Microsoft, and OpenAI rival Cohere.

The summit also spotlighted a new tie-up announced last week between Mountain View-based chip firm Groq and a subsidiary of the $1.7 trillion state oil firm Saudi Aramco — a deal aimed at building “the largest AI inference data center.”

Groq, founded in 2016 by former Google engineers, has established itself as one of the more serious competitors to chip giant Nvidia since the start of the AI boom. It specializes in chips dedicated to running AI models once they have been trained for a process known as inference, which is when AI draws conclusions based on data it has never seen before.

Last month, Groq announced that it had raised $640 million from the likes of BlackRock and Cisco in a funding round valued at $2.8 billion. Its CEO, Jonathan Ross, suggested that inference would be a key focus for the sector as “training AI models” is a solved problem.

For Saudi Arabia, AI doesn’t just present the chance to bet big on tech’s latest hype train. The kingdom, built on oil riches since the 1930s, is scrambling to diversify its economy at a time when world nations are weighing plans to reduce fossil fuel use.

In particular, this need to diversify forms a critical part of Vision 2030 — a grand economic plan to bring in new revenue streams. The plan is supported by the country’s sovereign wealth fund, the Public Investment Fund, or PIF.

Saudi Arabia generated a similar amount of hype around its AI ambitions in March when it held its LEAP conference. During the conference, Amazon Web Services CEO Adam Selipsky and IBM CEO Arvind Krishna spoke on the main stage with government minister Abdullah Alswaha.

AWS coupled the appearance with a commitment to invest over $5.3 billion in Saudi Arabia in the next few years to build data centers that provide the computing power required to run AI models behind generative AI applications.

That same month, The New York Times reported that the Kingdom had set aside $40 billion for a new fund dedicated to AI investments — a move that would create the world’s largest fund dedicated to the technology.

As part of the fund’s creation, key figures from PIF held talks with venture capital firm A16z to explore a strategic partnership. The US fund, led by Silicon Valley veterans Marc Andreessen and Ben Horowitz, has doubled down on its commitment to AI by planning to use a portion of the $7.2 billion it raised earlier this year to bet on companies at the industry’s vanguard.

For Saudi Arabia, having access to a heavyweight investment firm like A16z could give it an efficient way of identifying AI startups and founders making the most buzz in the Bay Area, the epicenter of the generative AI boom.

It’s clear then that Saudi Arabia means business on AI. It is ready to shore up as much capital as it needs to build vital infrastructure for AI while courting leading companies overseas with its deep pockets.

The stakes couldn’t be higher. AI looks set to be one of a handful of major industries — such as tourism and sports — it is betting on to move it successfully away from oil.

AI will need to be worth it for the kingdom in the long run.