- Saudi Arabia’s Public Investment Fund (PIF) aims to position the country as a global AI hub outside the United States, leveraging its energy resources and financial advantages.
- The development of AI technology, driven by the training of algorithms in large data centers, presents both opportunities and challenges, including significant energy consumption.
- PIF’s strategic plan includes substantial investments in domestic projects and international ventures, with a focus on building data centres and expanding AI capabilities to contribute significantly to the country’s economic growth.
With the AI wave sweeping globally, Saudi Arabia has set ambitious goals for AI development. The head of Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), stated on Thursday that they aim to establish Saudi Arabia as a global AI hub outside the United States, leveraging the country’s energy resources and financial advantages.
Also read: AI investment in China drops, bucking the global trend
The global leader of fossil fuels and renewable energy
AI technology involves training algorithms using clusters of thousands of chips in large data centres to perform various tasks, leading to a surge in electricity costs for tech companies as they compete to build increasingly complex AI models and roll out AI products to billions of users. At an investment event sponsored by the sovereign wealth fund, PIF President Yasir Al-Rumayyan stated, “We are well-positioned to become a hub for AI outside the United States … AI will consume a lot of energy, and in terms of fossil fuels and renewable energy, we are global leaders.”
He noted that as the world’s largest oil producer, Saudi Arabia has both the “political will” to drive AI projects and ample funding to advance AI technology. The development of generative AI technology requires significant data processing capabilities, and Al-Rumayyan’s remarks suggest that building data centres may be a core part of Saudi Arabia’s national strategy. He mentioned that PIF allocates over 70% of its funds to domestic projects and investments in Saudi Arabia, with the future goal of allocating 20% to 25% of funds to international investments.
AI will contribute significantly to Saudi Arabia’s economy
He also revealed that about 40% of the fund’s overseas investments are in the United States. PIF plans to allocate approximately $40 billion to $50 billion annually, with plans to increase the allocation to $70 billion annually between 2025 and 2030. In November last year, Saudi Arabia announced plans to open a new AI centre in Riyadh. PWC, a global consulting firm, forecasted last year that the AI industry would contribute over $135.2 billion to Saudi Arabia’s economy by 2030, equivalent to 12.4% of the gross domestic product (GDP).
