Saudi Arabia’s sovereign wealth fund PIF has sealed a strategic partnership with Google Cloud to establish a global artificial intelligence (AI) hub near Dammam, in the Kingdom’s Eastern Region.
The landmark deal, signed at the eighth edition of the Future Investment Initiative (FII8), further positions the Gulf nation as a global AI hub and a top destination for enterprises and start-ups.
The collaboration reportedly aims to enhance the Saudi workforce by offering AI programmes to millions of students and professionals, supporting the national objective of growing the information and communication technology (ICT) sector by 50%. Customers will now be able to leverage Google Cloud’s technology to drive growth across industries and expand the capacity for AI application delivery.
According to PIF, businesses and their consumers can anticipate improved AI application quality and data services, delivered locally and with greater efficiency. The PIF-Google Cloud partnership will also emphasise joint research on Arabic language models and Saudi-specific AI applications.
“Enabled by Google Cloud’s substantial investment and expertise in custom silicon, this high-performance infrastructure will feature the latest tensor processing unit (TPU) and graphics processing unit (GPU) accelerators, along with the Vertex AI platform – Google Cloud’s specialised development environment for building generative AI applications,” PIF added.
The sovereign wealth fund’s Governor Yasir Al Rumayyan said, “We are delighted to welcome this new Google Cloud AI hub to Saudi Arabia. This partnership demonstrates PIF’s dedication to fostering an AI-friendly environment through investments in human capital and technology, upskilling thousands with cutting-edge tools to support our sustainable and innovative infrastructure goals.”
According to him, the PIF-Google Cloud collaboration also underscores Saudi Arabia’s attractiveness for major tech initiatives.
“Investors are drawn to the nation’s strategic location at the crossroads of three continents, its advanced infrastructure, its access to fast-growing Middle Eastern markets, and the potential for reliable and affordable renewable energy to support the AI hub,” Al Rumayyan noted.
Research commissioned by Google Cloud and conducted by tech policy advisory firm Access Partnership estimates the new AI hub could contribute a cumulative USD 71 billion to Saudi Arabia’s GDP over eight years.
“Increased economic activity from AI adoption is expected to support the creation of thousands of highly skilled direct and indirect jobs. These investments expand on Google Cloud’s existing presence in Saudi Arabia, which includes the Dammam cloud region, launched in 2023 as part of Google Cloud’s global network of 40 regions,” the study noted.
President and Chief Investment Officer of Alphabet and Google Ruth Porat termed the strategic partnership with PIF as a force that will accelerate the adoption of AI in the local language and across industries, including healthcare, retail, financial services, and more, for enterprises and start-ups in Saudi Arabia, across the Middle East, Africa, and rest of the world.
Technology has emerged as one of PIF’s priority investment sectors, serving critical areas of the economy, including entertainment, financial services, healthcare, transportation, logistics, utilities, and renewables.
PIF’s telecom, communications, and technology investments include the Saudi Information Technology Company (SITE), which delivers digital and cyber services through national talent, and IoT Squared, a company specialising in the Internet of Things.
PIF and Google Cloud will explore enhancing the Arabic-language capabilities of Gemini, Google’s generative AI model family, by integrating additional Arabic datasets with Google Cloud’s technology, stated Porat. This will provide local businesses, researchers, and developers the opportunity to incorporate these models into their systems, enabling sophisticated Arabic-language AI agents and applications, Porat added.
In other good news, Wa’ed Ventures, the USD 500 million venture capital fund owned by Saudi Aramco, plans to invest USD 100 million in early-stage AI start-ups.
The fund has appointed an advisory board made up of AI leaders to source promising investment and accelerate the localisation of the industry in the kingdom. The board includes experts with experience at Meta, Amazon, Massachusetts Institute of Technology (MIT) and the University of Oxford.
Wa’ed Ventures has started deploying capital in the AI sector, including a USD 15 million investment in South Korean AI chipmaker Rebellions and a USD 6.5 million fundraising round for United States-based AI infrastructure start-up aiXplain. Out of its portfolio of 70 companies, eight are AI start-ups, including ventures from as far back as 2015.
The fund will aid in “positioning the Kingdom as a global AI hub, generating a strong pipeline of global early-stage AI startups”, it stated recently.
PwC estimates that AI could contribute USD 135 billion to the Saudi economy by 2030, representing around 12% of GDP. The Gulf country’s large population can provide early-stage start-ups with the potential to expand and scale with relative ease compared to more mature markets like the UAE, which tend to focus more on M&A activity, the British multinational professional services brand stated.
Saudi Arabia has made dedicated efforts to attract start-ups across sectors. It previously offered USD 888 million to companies in the digital payments, gaming and AI fields, and its venture capital funding in e-commerce alone hit USD 428 million in 2023.
From January to September 2024, the VC market across the Middle East and North Africa (MENA) region raised USD 1.3 billion, with Saudi Arabia securing nearly 40% of total funding, according to a Q3 2024 report by Dubai-based venture capital analysis platform Magnitt.