Saudi Arabia is in talks with Andreessen Horowitz to create an AI fund

DUBAI, United Arab Emirates – Saudi Arabia’s sovereign wealth fund is in talks with U.S. venture capital firm Andreessen Horowitz and potentially others to create a $40 billion fund to invest in artificial intelligence, according to New York Times reporting which was later confirmed by CNBC sources.

The move, which two people familiar with the matter told CNBC had been under discussion for months, would see Saudi Arabia’s $925 billion public investment fund (PIF) form a partnership with Andreessen Horowitz, one of the world’s largest venture capital firms in Silicon Valley.

The people stressed that the talks have not yet been finalized and declined to be named because of restrictions on speaking to the press. They also said they were not aware of any other potential parties in the talks besides Andreessen Horowitz and PIF.

PIF and Andreessen Horowitz did not immediately respond to CNBC’s request for comment.

Saudi Arabia’s PIF is on the buying spree as it seeks to diversify the kingdom’s revenue away from oil, a key pillar of Saudi Crown Prince Mohammed bin Salman’s Vision 2030 initiative. He has poured billions of dollars into stake purchases and mutual funds with major international companies such as Uber, Bank of America, Citi, SoftBank and Blackstone.

Andreessen Horowitz, village $35 billion in assets under management, has backed successful companies including Airbnb, Coinbase, Facebook and Slack, and has nearly 100 AI-related startups in its portfolio.

Co-founder Marc Andreessen wrote in a blog post on the firm’s website in June 2023 that “The threat of not the aggressive pursuit of global AI dominance … is significant.”