Saudi Arabia has designated $100 billion to AI and semiconductor development, aiming to strengthen its position as a tech leader and diversify beyond oil.
According to a Bloomberg report published on 7 November 2024, “Project Transcendence,” is the initiative that will attract top talent to the kingdom. Furthermore, it will strengthen the local tech ecosystem too.
#Saudi Arabia is planning a new #AI project with backing of as much as $100 billion as it seeks to develop a technological hub to rival the neighboring #UAE https://t.co/a9QWiNGbfr via @technology @DNair5 @MattMartin128 @EdLudlow
— Zainab Fattah (@ZainabFattah) November 7, 2024
Moreover, Saudi is working to lead in the region’s AI and semiconductor sectors, and to step up to UAE’s tech hub
The investment will be initiated by Saudi Arabia’s Public Investment Fund (PIF), while development activities will be through its technology-focused unit, “Alat.”
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Saudi Arabia’s $100 billion AI and semiconductor initiative is potentially expected to support blockchain and cryptocurrency sector growth within the kingdom.
Edge Middle East reported that Middle East and North Africa account for 7.5% of the cryptocurrency market, valued at $338.7 billion, according to on-chain data from July’23 to June’24.
The latest investment aligns with Saudi Arabia’s aim to build tech infrastructure capable of handling blockchain technology’s computational demands.
Saudi Arabia’s initiatives aim to elevate its standing in digital finance, making it an appealing destination for institutional crypto investors.
Moreover, Saudi Arabia recently joined Project mBridge, a central bank digital currency (CBDC) pilot organized by the Bank for International Settlements (BIS). This is in partnership with central banks from China, Hong Kong, Thailand, and the UAE.
Project mBridge focuses on establishing faster and cost-effective cross-border transactions through CBDCs. Saudi Arabia’s participation reflects an interest in exploring CBDCs within a regulated, international collaboration. This enables the Kingdom to assess the potential benefits of digital currency solutions in global finance.
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Through Alat, Saudi Arabia’s Public Investment Fund is planning to channel resources into building a domestic AI and semiconductor industry.
Speaking at the 8th FII conference, Amit Midha, the CEO of Alat said “Our mandate is to build a global supply chain node, enabling world-class companies to establish a presence in Saudi Arabia.”
“Saudi Arabia is ready to partner for resilience.” Alat CEO @amitmidhaCEO highlighted how the Kingdom is primed to lead the next era of global supply chains through #Alat at the recent #FII8 in Riyadh. #TomorrowMadeBetter pic.twitter.com/NnRpRsZ7CA
— Alat | #TomorrowMadeBetter (@alat_tech) November 8, 2024
This effort would essentially target sectors where AI integration could enhance efficiency and meet global standards.
Meanwhile, in semiconductors, Alat is focused on establishing a manufacturing and production network that serves both local and international markets.
The collaboration would focus on developing a skilled workforce in AI and semiconductor technologies. This aligns with Vision 2030’s broader goals for diversification.
Additionally, the kingdom is partnering with major tech companies like the Lenovo Group, who signed a $2 billion convertible bond agreement with Alat. The initiative will be aimed at establishing Lenovo’s regional headquarters and a manufacturing facility in Saudi Arabia to serve the Middle East and Africa.
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Saudi’s Tech Expansion Signals Major Economic Shifts
Saudi Arabia’s investments in AI and semiconductors have attracted significant international interest. Bloomberg highlighted a regional shift toward technology-led development.
Partnerships with companies like SoftBank and Lenovo could essentially create pathways for foreign direct investment (FDI). This will enable Saudi Arabia to align with Western tech standards and collaborate with US-based firms.
Saudi is focused on workforce development and manufacturing facility expansion. Hence, this could signify a shift from an oil-reliant economy to one centered on innovation and technology.
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