Holding $925 billion assets under management, Saudi Arabia’s Public Investment Fund (PIF) continues to accelerate the oil-rich country’s push towards AI.
As a sovereign wealth fund, PIF complements the Saudi Data and Artificial Intelligence Authority (SDAIA) government agency as well as having the Saudi Company for Artificial Intelligence (SCAI) as its AI arm.
In turn, SCAI works in concert with major companies like Saudi Aramco (TADAWUL:2222) to build up an AI ecosystem. Following President Trump’s state visit to Saudi Arabia on Tuesday, all of these building blocks coalesced into a major announcement.
Together with other tech firms, Nvidia (NASDAQ:NVDA) formed a partnership with PIF’s HUMAIN, another PIF subsidiary focused on AI. HUMAIN is tasked to build up a 500 MW worth of data centers/AI factories, featuring up to 18,000 Nvidia’s cutting edge GB300 Blackwell chips in the first phase of development.
Nvidia will also deploy up to 5,000 Blackwell chips under the guidance of SDAIA for smart city solutions. Aramco Digital, the subsidiary of Saudi Aramco formed in 2023, will also join in to erect AI enterprise platforms. “It marks a significant step toward positioning the Kingdom (TADAWUL:4280) as a leader among data- and AI-driven economies, and in building a knowledge-based society and an advanced digital economy aligned with the objectives of Saudi Vision 2030.”H.E. Dr. Abdullah bin Sharaf Alghamdi, SDAIA’s president.
This announcement perfectly mirrors our previous coverage on the importance of AI for world’s governments. Let’s examine how these moves form a clear picture for future trends.
AI: Setting Up New Governmental Systems
At a superficial level, most people view AI as a content generator or a set of productivity tools. However, from early on, we insisted that this is AI’s secondary role, one that is already heavily regulated. AI’s primary role is to fortify governance systems.
In November 2024, in exploring whether there is such a thing as an AI bubble, we noted that this is extremely unlikely. Foremost, there has never been such a tight coordination between power nodes to make AI happen, from the World Economic Forum (WEF) to the world’s largest and most influential NGO, Tony Blair Institute for Global Change (TBI).
The former UK prime minister himself, Tony Blair, has a collaborative relationship with Larry Ellison, executive chairman of Oracle (NYSE:ORCL). Alongside gaining control of Paramount Global, Ellison took the public spotlight just after President Trump’s inauguration to present the Stargate project at the White House.
Akin to Saudi Arabia’s AI push across its funds, agencies and companies, the $500 billion worth Stargate is another example of mature private-public partnerships (PPPs).
Together with Palantir (NASDAQ:PLTR), the common thread for the AI push is one of evolved governance that blurs the line between corporate and political governance:
- AI acts not only as a content interpreter but as a behavior shaper through interaction.
- Itself bound by given datasets, AI can intervene on a granular level to bolster embedded narratives.
- Narrative control is a critical make-or-break point for governance, and AI can optimize and automate processes leading to public opinion formation.
- AI is a force multiplier, enabling tight-nit groups to exert control beyond their capacity.
- As a multiplier of interventionist force, AI reduces the need for personal loyalties and instead enforces system-driven loyalties.
- As intellectual work is delegated to AI, the narrative space will grow more uniform, leaving behind alternatives with friction potential.
Within global social media platforms, such as YouTube and TikTok, it is already clear that algorithmic interception is in full force as comments are routinely auto-removed or shadow-banned.
Perhaps most importantly, AI can generate digital mirrors of physical states such as cities via IoT devices. Within these mirrors, control nodes can then run scenarios and deliver decisions to implement in the physical world. This is why Saudi Arabia’s HUMAIN will use Nvidia Omniverse Cloud to run and test “physical AI solutions with digital twins.”
Scaling up economically within robotic platforms to automate physical processes, control nodes are then less vulnerable to communal resistance to policies. Traditionally aligned with the U.S. and Israel, and already tightly controlled as a monarchy, oil-producing Saudi Arabia makes the ideal pick for testing and expanding AI capacities.
In the immediate investment phase following President Trump’s visit to Riyadh, the reciprocal partnership is worth $600 billion across AI, healthcare, manufacturing, energy and military sales.
Companies to Benefit the Most from Saudi Arabia’s Investment Spree
Coinciding with President Trump’s visit to Saudi Arabia, we extensively covered Super Micro Computer (NASDAQ:SMCI) as one of the beneficiaries of AI data center build up. Not surprisingly, Supermicro is also front and center in the Kingdom’s efforts to become an AI hub.
DataVolt, as Saudi’s largest data center company, picked Supermicro to supply server solutions to hyperscale aforementioned AI factories in the Kingdom. The deal is valued at $20 billion, which is 73% of Supermicro’s current market cap weight.
Predictably, this pushed SMCI stock beyond analyst estimates, tracking a 40% value boost over the week. However, $20 billion is just a part of the $100 billion joint investment package, as Oracle, Alphabet (NASDAQ:GOOGL), AMD (NASDAQ:AMD) and Saleforce are set to contribute $80 billion.
On the energy front, GE Vernova secured gas turbine and energy system deals worth $14.2 billion. US-based engineering companies AECOM, JAbovs, Parsons (NYSE:PSN), and Hill International tapped into $2 billion worth of export services by contributing to Saudi’s The Vault, Qiddiya City and King Salman International Airport.
In the aerospace sector, Boeing (NYSE:BA) is set to deliver $4.8 billion worth of 737-8 aircraft to Saudi’s AviLease and a recent deal was announced with Qatar Airlines which according to US president Donald Trump was the largest one in the aerospace company’s history. The biggest individual package, however, comes from Saudi’s defense spending of up to $142 billion. All the major US companies will contribute to modernize the Kingdom’s naval, coastal, space and military modernization.
Given that US-led Big Tech is building up Saudi Arabia as a major AI hub, it would make sense that USG would protect these assets for the long haul. It is also indicative that the public-private partnership (PPP) model has moved beyond domestic formation into international waters.
Lastly, $14 billion worth of Saudi capital will pour into US-based energy, aerospace and sports sectors from the three respective funds.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
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