Saudi Arabia’s Ambitious AI Venture and Global Implications”
Saudi Arabia wants to join the AI race, which can only mean one thing. A ludicrous investment is. Loading. Guess how much the kingdom is planning to splurge? Reports say $40,000,000,000.04 00:40 billion to make Saudi Arabia a hub of artificial intelligence. Now, first, some context. OpenAI is probably the most famous AI firm on the planet.
Their valuation is $80 billion. So Riyadh is investing half of that money in AI. But then again, this is Saudi Arabia. When was lack of money ever a problem for them? So let’s look at their plan. Saudi Arabia’s PIF is leading this mission. PIF is a public investment fund.
It handles the kingdom’s investments. Now, reports say they’re in talks with other financiers as well, chief among them, Andreessen Horowitz. It’s a US venture capital firm. It’s a huge supporter of artificial intelligence. And one of its founders is Mark Andreessen
He says AI could save the world. So Riyadh wants Andreessen Horowitz to open an office in the kingdom. The hope is to get the fund running by the second half of 2024, the second half of this year. But will investors take the bait? Will top engineers come to Saudi Arabia? The PIF chief certainly thinks so.
He believes Saudi Arabia has some advantages. Let me quote from what he said. AI will consume a lot of energy, and we are the global leader when it comes to fossil fuel energy and when it comes to renewable energy. And he could be right. AI requires a lot of processing power. Sometimes thousands of chips work in tandem, which means a lot of electricity is needed. Data centers will need 50% more power by 2027. And Riyadh has a lot of it. They’re the third largest producer of fossil fuels. Plus, the AI bet aligns with the kingdom’s long term goal.
Crown Prince MBS Mohammed bin Salman calls it Vision 2030. The plan is to diversify away from oil to focus on other industries, like tourism and technology. So, on paper, Saudi Arabia has all the ingredients, a lot of money, a lot of energy, and some flexibility on regulation, plus a young population. But can it attract the best talent? You see, Saudi Arabia is largely a closed society, so getting people to come and work there will be tough. Does Riyadh have a plan for that?
The plan is networking. One of the kingdom’s top colleges is Kaust King Abdullah University of Science and Technology. It is led by this man, Dr. Tony F. Chan. Now, Chan has worked mostly in western colleges. He’s taught at Yale and UCLA. And before that,
he studied at Caltech and Stanford. So the idea is to spread the word, to use big names to attract top talent. And it’s not just Saudi Arabia. The UAE is also investing in AI. In 2020, Abu Dhabi opened the world’s first university dedicated to artificial intelligence. Today, they have a minister for artificial intelligence. All of this is driving the industry in West Asia. So, good news for them
It could mean more jobs and less dependence on oil. But for countries like India, it is also a wake up call, a nudge, to invest more. In fact, this month, India unveiled a new AI mission. The plan is to spend 10,000 crore rupees over five years. That’s around $1.2 billion over the next five years. But Saudi Arabia is spending $40 billion. Do you see the gap here?
India cannot compete with the Gulf on financing, so India must look elsewhere, like talent and market power, or partnerships with existing AI players. And one such opportunity could be opening up.
The indian government is looking to buy 10,000 GPUs. What’s GPU? Graphics processing unit. These GPUs are the building blocks of artificial intelligence. The plan is to make these GPUs available to Indian AI firms. But where will these GPUs come from? Maybe Nvidia.
Its founder says he wants to step in. Let me, in fact, quote from what he said. If India is buying GPUs for AI, Nvidia builds really good AI GPUs. When you go back, please spread the word. If somebody wants to buy GPUs, I’m open for business, and we are quite interested in it. So Nvidia is game, and they’re the top dogs.
Right now, the company makes up 80% of the AI chip market. One company, 80%. Everyone buys from them. Amazon, Google, Meta, Microsoft, OpenAI, Tesla. All these companies buy Nvidia chips. And this week, they unveiled a new product, the Blackwell B 200 chip. Listen to this.
This is Hopper. This is Hopper. Hopper changed the world. This is blackwell. It’s okay, Hopper. You’re very good. Good boy. Good girl. 208,000,000,000 transistors. And so you could see. I can see they’re.