“Saudi Arabia is a country of entrepreneurs. More and more young people want to start their own tech companies. There is a real boom. This is evident on various platforms of the Saudi New Economy, such as at an expo by the Misk Foundation, a youth development foundation founded by Crown Prince Mohammed bin Salman over a decade ago, which now serves as a pioneering organization for the prince’s vast ambitions.
In time for the special meeting of the World Economic Forum (WEF), held in Riyadh for the first time this year, the Misk Foundation invited young managers to showcase the direction in which the kingdom aims to move. Bin Salman has big plans. According to his vision, the oil-dependent, conservative desert state is to become a digital powerhouse – a country full of IT engineers, startups, cloud computing companies, and a global leader in artificial intelligence (AI). Thus, the powerful prince, who has ruled Riyadh with near-absolute authority for almost eight years, has committed to massive investments in AI.
Bin Salman recently announced to international investors and entrepreneurs that he would establish a $40 billion fund for AI projects. This makes the Gulf state the world’s largest AI investor overnight, sparking a gold rush. The venture capital firm Andreessen Horowitz from Silicon Valley is also jumping on board, investing additional billions. Amazon plans to invest $5.3 billion in the kingdom, including building cloud data centers. Google and Microsoft also want to be part of the Saudi tech boom and are expanding their involvement.
Riyadh’s crown prince, a self-proclaimed enthusiast of video games and technology, has long aimed to transform his country into a digitally advanced state. His focus on AI fits perfectly into his “Vision 2030” – an ambitious master plan designed to rapidly and comprehensively reform Saudi Arabia, freeing it from its dependency on oil.
But why should the future lie in Saudi Arabia, a country where public executions took place just ten years ago and TV preachers claimed the earth was flat? According to a Canadian AI entrepreneur, who was also invited to speak in Riyadh, the country does have potential. Especially in the development of supercomputers, which play an increasingly important role in AI research, significant resources are required. He, who develops AI-based solutions for buildings, explains that Saudi Arabia can provide these resources.
Therefore, the Gulf states are not skimping when it comes to money. They announced plans to build one of the world’s largest supercomputers to attract leading AI experts to the well-funded KAUST tech university. However, Saudi Arabia is not an easy place for free spirits. The country remains conservative and authoritarian, where dissent is not tolerated. For instance, women’s rights activist Manahel al-Otaibi was recently sentenced to eleven years in prison by a Saudi court for demanding too many freedoms for women too quickly, instead of waiting for gradual reforms from above. A creative tech ecosystem cannot simply be conjured with money and orders from the top.
Riyadh is aware of this challenge. Thus, the government is making strong efforts to promote local talent. Recently, they opened “The Garage,” a massive startup hub spanning nearly 30,000 square meters, the largest in the Middle East. Here, young founders find everything they need: office space, a pleasant work environment, and, of course, investors.
Can this truly create young Saudi top-class tech entrepreneurs? Successful founders cannot be conjured out of thin air. In countries like India, for example, there are far more and often better talents, as globally, Saudi Arabia, with its 30 million inhabitants, is relatively small. Furthermore, most Saudi IT projects are still backed by investors directly or indirectly linked to the Public Investment Fund (PIF) – the Saudi state fund that continues to finance everything in the kingdom with its oil money. The fund is not picky with its investments. Often, merely presenting a reasonably sensible concept is enough to secure loans. Many disagree, however: “It’s not true that everyone just gets money. The requirements have become stringent. You need a good idea that resonates and can succeed in the market.” Nevertheless, even they must admit that the existing incubators, startup hubs, and billion-dollar programs have primarily produced online delivery services or job boards, rather than major innovations.
More and more tech companies in the fintech sector are emerging. In the industry, there are always trends and buzzwords, and currently, AI is the big hype. Everything now must include AI. However, whether it is genuinely sensible for young Saudi entrepreneurs to jump on this trend is questionable.
Riyadh’s goals go beyond merely building a Silicon Valley in the desert. Mohammed bin Salman is using the tech boom to position his country politically. He hopes to benefit from the AI competition between the US and China. At the same time, he faces competition from neighboring countries. The United Arab Emirates, for instance, announced a major AI initiative a year ago.
Since Riyadh often seems to lag behind Dubai, the crown prince is trying to compensate for the delay with sheer scale. Everything in Saudi Arabia must therefore be bigger and more impressive. This is why he plans to build entire megacities in the desert, aims to host the World Cup, and even wants to venture into space.
Whether these big ideas will ever be realized remains to be seen. Already, bin Salman has had to scale back some of his plans. For example, “The Line,” a futuristic city consisting of a single, AI-controlled building block that was originally supposed to be 140 kilometers long, has been reduced to just a few kilometers. Additionally, “Mohammed,” the first AI-powered robot from Saudi Arabia, recently made headlines when it unexpectedly groped the butt of a female reporter.
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