Saudi Arabia has become the sole foreign investor in Zhipu AI, a Chinese start-up aiming to rival OpenAI, according to a report by The Financial Times. The investment comes from Prosperity7, a venture capital arm of the state-owned oil group Saudi Aramco.
Prosperity7 recently participated as a minority investor in a funding round for Zhipu AI, which has become the largest generative AI start-up in China by staff numbers. Historically, Zhipu AI has depended on local investments and government support due to increasing US restrictions on Chinese AI development. Previous backers include Alibaba Cloud and Tencent, alongside state investors such as the National Social Security Fund.
The US has imposed several measures to hinder China’s AI progress, including restricting access to advanced AI chips and prohibiting certain US investments in the sector. Amid these tensions, the Biden administration is considering stricter regulations to prevent Chinese acquisition of essential hardware.
Saudi Arabia’s investment highlights a strategic move to counter US dominance in the AI industry. “The Saudis don’t want Silicon Valley dominating this industry,” a source close to Prosperity7 told the FT. This sentiment echoes broader international concerns about the concentration of AI innovation within the US, home to leading entities like Meta, Microsoft, and OpenAI.
Washington’s stance has pressured other countries to limit their support for China’s tech sector. However, the new Saudi investment indicates a growing alignment between Saudi state investors and Chinese technology firms seeking alternative capital sources.
As Zhipu AI continues to expand, support from foreign investors is seen as a crucial step towards opening new markets beyond China. This collaboration underscores the Kingdom’s increasing influence in the global tech ecosystem and its efforts to diversify its economic interests.
“The importance of Saudi Arabia to the Chinese tech ecosystem has grown so much because the US funds aren’t here,” commented a tech consultant in Beijing.
