By
Chimamanda U. Martha
March 28th, 2024
Two insiders disclosed that negotiations have not reached a final stage and chose not to reveal their identities due to press communication regulations.
Two sources familiar with the matter have revealed that Saudi Arabia’s sovereign wealth fund is engaging in discussions with American venture capital firm Andreessen Horowitz, among other potential partners, to establish a $40 billion fund dedicated to investing in artificial intelligence (AI).
This initiative has reportedly been under consideration for several months. Thus, this partnership would entail a collaboration between Saudi Arabia’s $925 billion Public Investment Fund (PIF) and Silicon Valley-based prominent VC firm Andreessen Horowitz.
The individuals emphasized that negotiations have not reached a final stage and chose not to disclose their identities due to press communication regulations. Furthermore, they mentioned that aside from Andreessen Horowitz and the PIF, they are unaware of any other potential parties involved in the discussions.
Saudi Arabia’s PIF has been actively acquiring assets as part of its strategy to diversify the kingdom’s revenue sources beyond oil. It has been a key initiative of Saudi Crown Prince Mohammed bin Salman’s Vision 2030 initiative. The fund has invested billions of dollars in acquiring stakes and establishing joint ventures with prominent international corporations such as Bank of America, Uber, Citi, SoftBank, and Blackstone.
Andreessen Horowitz Pursues AI Investments
With $35 billion in assets under management, Andreessen Horowitz has provided support to thriving enterprises such as Airbnb, Coinbase, Facebook, and Slack. Additionally, the firm maintains an extensive portfolio comprising nearly 100 startups in the realm of artificial intelligence.
Earlier this year in January, Quora secured $75 million in funding from Andreessen Horowitz (a16z), its first funding round in almost seven years. This investment will bolster the growth of Poe, Quora’s AI chat platform. In a departure from conventional revenue sources such as YouTube ad revenues, Quora’s creators can now monetize their endeavors in crafting compelling AI bots on the platform.
On the other hand, Saudi Arabia is making a big push to navigate from its conventional oil economy with new tech adoption. The country has been keen on attracting major tech firms that can drive the next stage of the technological revolution.
Earlier this year, the Saudi Ministry of Culture partnered with droppGroup and Oracle to introduce the Cultural Universe, described as a government-operated national metaverse initiative.