Saudi Arabia Plans $100 Billion AI Initiative: Project Transcendence

Saudi Arabia is launching a new artificial intelligence initiative, backed by up to $100 billion, as part of its ambition to establish itself as a global technology hub, competing with the United Arab Emirates, as reported by Bloomberg. According to sources familiar with the plans, this state-backed project, dubbed “Project Transcendence,” will focus on developing AI through investments in data centers, startups, and infrastructure. Additionally, the project will aim to attract talent, foster the local ecosystem, and encourage tech companies to invest in the country.

The initiative will build on Saudi Arabia’s already extensive efforts to establish itself as a leader in AI development. It is expected to be structured similarly to Alat, a fund focused on sustainable manufacturing, which is also backed by $100 billion from the Public Investment Fund (PIF) of Saudi Arabia. Alat is chaired by Crown Prince Mohammed bin Salman and aims to co-invest with large international companies.

A key element of Project Transcendence will involve a collaboration between Saudi Arabia’s PIF and Alphabet Inc.’s Google to create an AI hub. This partnership, which may involve an investment between $5 billion and $10 billion, will focus on developing AI models in Arabic. The companies plan to launch initiatives aimed at enhancing AI development, with Google’s stock increasing by 4% on Wednesday, reaching $176.51.

Project Transcendence is expected to work closely with established tech giants, with Saudi Arabia offering both infrastructure and capital. In total, the project’s investments could range from $50 billion to $100 billion.

The initiative is set to bring together various government bodies to fund AI infrastructure and startups, while bridging the gap in AI expertise between Saudi Arabia, the U.S., and China. According to insiders, Saudi officials envision creating a national AI entity capable of rivaling Abu Dhabi’s G42 tech conglomerate.

AI plays a pivotal role in Saudi Arabia’s Vision 2030 strategy, which aims to diversify the economy away from fossil fuels by identifying new sources of revenue. One of the kingdom’s key objectives is to rank among the top 15 countries in AI by the end of the decade, using the technology at home and later exporting it from 2030. Saudi Arabia has already launched several research centers and ministries dedicated to AI and developed large language models similar to OpenAI’s ChatGPT.

However, the Crown Prince’s other high-profile project, the $1 trillion Neom development, is facing funding cuts as Saudi Arabia anticipates several years of budget deficits.

In addition to Project Transcendence, the PIF has been in discussions with venture capital firm Andreessen Horowitz to create a fund focused on AI investments, potentially reaching $40 billion in commitments. The PIF intends to manage the fund and participate in the investment alongside other investors, according to people familiar with the matter.

The Saudi government has yet to comment on the matter.