Saudi Investment Fund Ready to Cut Ties with China, Says Alat Chief

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In a move that could have significant implications for US-China relations, the head of Saudi Arabia’s new investment fund for semiconductor and artificial intelligence (AI) technology, Amit Midha, has indicated that the country would divest from China if requested by the US. Alat, backed by $100 billion in capital from the Public Investment Fund, aims to navigate the complex landscape of global technology partnerships while prioritizing its relationship with the United States.

Midha highlighted that while the current focus has been on maintaining separate manufacturing and supply chains, the fund is prepared to divest from China if its partnerships with the country challenge US interests. This stance underscores the strategic importance of the US-Saudi relationship in shaping the future of technology industries.

Recent reports suggest that US officials have been urging Saudi Arabia to choose between Chinese and American technology as part of efforts to develop the Saudi semiconductor industry. This push comes amidst ongoing discussions between the two countries on various national security issues, reflecting the broader geopolitical tensions surrounding technology and trade.

Speaking at the Milken Institute Global Conference in California, Midha emphasized the importance of establishing trusted and secure partnerships in the US. He highlighted the US as the leading partner and market for AI, chips, and semiconductor industries, signaling Saudi Arabia’s commitment to strengthening ties with American technology firms.

Saudi Arabia’s ambitions in advanced technology extend beyond semiconductor manufacturing, encompassing the development of data centers and AI companies. However, these aspirations coincide with heightened scrutiny from the US regarding Middle Eastern countries’ relationships with China. Concerns have been raised that nations like Saudi Arabia and the United Arab Emirates could facilitate Chinese access to technology restricted by US regulations.

The US has previously pressured regional AI firms to divest from Chinese technology in exchange for continued access to US systems powering AI applications. This dynamic was exemplified by the agreement between Abu Dhabi-based AI firm G42 and US tech giant Microsoft Corp., which saw G42 agreeing to divest from Chinese technology in exchange for a $1.5 billion investment from Microsoft.

Looking ahead, Alat aims to forge partnerships with two US tech companies by the end of June, signaling a strategic shift towards closer collaboration with American firms. While specifics of these partnerships remain undisclosed, Midha confirmed that Alat would co-invest alongside a US investment firm, indicating a mutual interest in advancing AI and semiconductor technologies.

The evolving dynamics between Saudi Arabia, the US, and China in the realm of technology investment underscore the complex interplay of economic interests, national security concerns, and geopolitical rivalries. As countries vie for leadership in critical industries, decisions made by investment funds like Alat could have far-reaching implications for global technology ecosystems and international relations.

As reported by Bloomberg in their recent article