Market Data 
Saudi Arabia is reportedly mulling over a substantial $40 billion investment fund aimed at advancing artificial intelligence (AI), which is purportedly slashed for the latter half of the year.
Sources also suggest that a potential collaboration with Silicon Valley venture capital firm Andreessen Horowitz (a16z) is being explored by the Saudi Arabian government’s Public Investment Fund to oversee these AI investments.
The New York Times, citing three individuals familiar with the matter, disclosed that additional venture capitalists might also participate in this fund, and the partnership with a16z could involve the establishment of an office in Riyadh, the capital of Saudi Arabia.
The rapport between Ben Horowitz, one of the founders of a16z, and the fund’s governor Yasir Al-Rumayyan, is noted as a factor potentially influencing this partnership. If the proposed $40 billion investment materialises, Saudi Arabia would become the largest investor in the AI domain. Although two of the sources mentioned by The New York Times anticipate the fund’s launch in the latter half of 2024, these plans remain subject to change.
List of the large language model providers that have received investments from a16z. Source: a16z
In comparison, Microsoft’s investments in OpenAI, the developer of ChatGPT, total $13 billion across multiple funding rounds, which is less than half the size of Saudi Arabia’s proposed fund. The financing for Saudi Arabia’s AI fund is anticipated to be drawn from the Kingdom’s $900 billion sovereign wealth fund, with a focus on investing in chip manufacturers and large data centres capable of supporting AI technology. The possibility of establishing indigenous AI companies is also being considered.
Discussions regarding a prospective collaboration between Saudi Arabia and a16z have been ongoing since at least April 2023. In an interview with former WeWork CEO Adam Neumann in April 2023, Ben Horowitz lauded Saudi Arabia as a “startup country,” implying a growing prominence in the startup ecosystem compared to the United States, which he suggested was losing momentum.
.@a16z founders @bhorowitz and @pmarca spoke with Adam Neumann about Saudi Arabia at a Saudi-sponsored conference last week:
some takeaways:
— praised SA as a “startup country”
— “his royal highness” acts as SA’s de facto “founder”
— US is slow, SA is fast pic.twitter.com/eUIM1ZN1cv— This Week in Startups (@twistartups) April 5, 2023
Meanwhile, in October of the same year, U.S. President Joe Biden issued an executive order calling for new AI safety standards, garnering commitments from 15 prominent AI firms. Among the measures implemented is the utilisation of the Defense Production Act to compel AI firms to disclose “essential information,” including AI safety test outcomes, to the Department of Commerce.
These developments coincide with OpenAI CEO Sam Altman’s recent pursuit of $7 trillion from Saudi Arabia’s neighbouring country, the United Arab Emirates, to advance the development of more sophisticated semiconductor chips.
