Saudi Arabia Pushes for AI Power With Megafund, Direct Investments

The eyes of Bader Al Mana—deputy chief investment officer at Sanabil, the venture arm of Saudi Arabia’s sovereign wealth fund—were heavy with jet lag last month as he spoke about his firm’s pursuit of investments in artificial intelligence startups at The Montgomery Summit in Los Angeles. Sanabil is focused on taking direct stakes in startups and building out its own AI playbook, he told the invite-only gathering of startup investors and entrepreneurs.

Behind the scenes, Saudi Arabia is working on making an even bigger splash in AI. The kingdom’s government has considered launching a megafund with Andreessen Horowitz focused on AI investments, according to a person briefed on the matter. Its size would rival Saudi Arabia’s $45 billion stake in SoftBank’s Vision Fund, the person said. Such a fund could rock the AI landscape in a period when many investors are cash constrained due to a dormant stock market and high interest rates.

The moves are part of Saudi Arabia’s effort to get much closer to tech startups than it was in the days when it was seen as a bottomless source of petro dollars that used venture capitalists to invest on its behalf. Amid the current investing frenzy in AI, the country sees its next wave of dealmaking as a way to develop homegrown versions of the technology. To do that, the Saudis are encouraging startups they invest in directly to establish a presence within the country’s borders, whether through physical offices or business deals with local corporations.