Saudi Arabia: A Global AI and Chip Powerhouse with a US-China Dilemma”.

Saudi Arabia is set to establish itself as a leader in advanced technology within the region, with plans to create data centers, AI companies, and semiconductor manufacturing facilities. To address concerns about the Middle East’s connections to China, the US has advised Saudi Arabian counterparts to choose between Chinese and American technology as they work to develop the Saudi Arabian semiconductor industry.

In response to these concerns, Amit Midha, CEO of Alat, Saudi Arabia’s new investment fund for semiconductor and artificial intelligence technology, has stated that the country would divest from China if requested by the US. He expressed that while the current requests have been to keep manufacturing and supply chains separate, they would divest if partnerships with China became an issue for the US. Alat is backed by $100 billion in capital from the Public Investment Fund.

The US is reportedly concerned about countries like Saudi Arabia and the United Arab Emirates providing Beijing with access to technology that Chinese firms are restricted from acquiring in the US. The country has asked AI firm G42, based in Abu Dhabi, to divest from Chinese technology in order to maintain access to US systems powering AI applications. This agreement led to a significant $1.5 billion investment by Microsoft Corp. in G42.

Alat is planning to announce partnerships with two US tech companies by the end of June and will co-invest alongside a US investment firm. However, Midha did not disclose the names of these companies or specify whether they are focused on AI or chips or both.