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Saudi Arabia is reportedly funding a Chinese startup that aims to take on OpenAI

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Saudi Arabia is reportedly funding a Chinese startup that aims to take on OpenAI

A Saudi fund recently became the sole foreign investor in Zhipu AI, a startup that’s part of Chinese efforts to build an OpenAI rival, The Financial Times reported citing two unnamed sources.

According to the report, Prosperity7, which is part of the state-owned oil group Saudi Aramco, recently participated in the latest funding round for the Chinese startup as a minority investor.

Zhipu AI is the largest generative AI startup in China by staff numbers, but has previously been forced to rely on local investment and government support amid growing US restrictions. Its previous investors include Alibaba Cloud and Tencent, as well as support from state investors, including the National Social Security Fund, per the FT.

The US has imposed a series of restrictions aimed at hobbling China’s AI development, including limiting access to advanced AI chips and banning some US investment in the sector.

Tensions between Washington and Beijing have been escalating over issues such as AI chips, with the Biden administration reportedly considering harsher rules to stop Chinese customers from buying the vital hardware.

Chinese officials have also asked domestic tech giants to buy locally-made AI chips.

In response, companies, including TikTok owner ByteDance were told to cut spending on foreign-made chips like those from Nvidia, The Information reported.

The fresh Saudi investment demonstrates that the kingdom may be looking for a way to stop America from dominating AI. The US is home to most of the leading players including Meta, Microsoft, and OpenAI.

One person close to Prosperity7 told the FT that the Saudis “don’t want Silicon Valley dominating this industry.”

Representatives for Aramco and Zhipu AI did not immediately respond to requests for comment, made outside normal working hours. Neither company responded to the FT’s requests for comment.

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