In recent weeks, representatives of Saudi Arabia's Public Investment Fund (PIF) have held discussions with top Silicon Valley venture capital firm Andreessen Horowitz and other financial institutions about potential partnerships at the AI level, according to people familiar with the matter.。

The sources were not authorized to speak publicly, noting that plans could still change.。The tech fund will make Saudi Arabia one of the world's largest investors in artificial intelligence.。The $40 billion fund makes it far more than the typical amount raised by a U.S. venture capital firm, second only to Japan's SoftBank Group, which has long been one of the world's largest startup investors.。The investment plan is likely to start in the second half of 2024.。

The fund, set up with the help of Wall Street banks, will be the latest potential market participant to join the AI investment boom.。The global boom in AI has pushed up valuations for private and public companies, and optimistic investors are racing to find or build the next Nvidia or OpenAI.。For example, startup Anthropic raised more than $7 billion in funding in just one year, almost unprecedented in the world of venture capital.。

The cost of funding AI projects is high。OpenAI CEO Sam Altman has reportedly raised a large sum of money from the UAE government to increase the chip manufacturing capabilities needed to power AI technology.。

Other VCs are also likely to be involved in Saudi Arabia's tech fund, sources say。Due to PIF's strong financial strength and growing ambitions, the international business community is closely watching the actions of the organization, which was founded in 1971.。

Saudi Arabia invested $3.5 billion in Uber in 2016, but has not had much success in investing in technology.。Saudi Arabia has also pumped $45 billion into SoftBank's $100 billion Vision Fund, which has put money into dozens of businesses, including failed cases of other startups like WeWork and Zume, the already bankrupt real estate company.。