Saudi Arabia’s new investment fund for semiconductor and artificial intelligence technology, Alat, has announced that it will divest from China if requested by the US. The chief executive officer of Alat, Amit Midha, stated that while current requests have been to keep manufacturing and supply chains separate, they would divest if partnerships with China became an issue for the US.
According to reports by Bloomberg, US officials have advised Saudi Arabian counterparts to choose between Chinese and American technology as they work to develop the Saudi Arabian semiconductor industry. The talks on national security issues have emphasized the importance of trusted and secure partnerships in the US. Midha expressed that the US is the number one partner and market for the AI, chips, and semiconductor industry.
Saudi Arabia is aiming to establish itself as a leader in advanced technology within the region. The country hopes to create data centers, AI companies, and semiconductor manufacturing facilities. Concerns have arisen in the US about the Middle East’s connections to China, with worries that countries like Saudi Arabia and the United Arab Emirates could provide Beijing with access to technology that Chinese firms are restricted from acquiring in the US.
To address these concerns, G42, an AI firm based in Abu Dhabi, has agreed to divest from Chinese technology in order to maintain access to US systems powering AI applications. This agreement led to a significant $1.5 billion investment by Microsoft Corp. in G42. Alat is planning to announce partnerships with two US tech companies by the end of June and will co-invest alongside a US investment firm. However, Midha did not disclose the names of the companies involved in these discussions or specify whether they are focused on AI or chips or a combination of both.
The decision made by Alat comes at a time when tensions between China and other countries are high due to trade disputes and geopolitical concerns. Saudi Arabia’s stance towards China may be seen as a way of balancing its relationship with its long-standing ally America while also pursuing its own economic interests.
In conclusion, Alat’s decision shows that even though Saudi Arabia is looking at developing its own technological capabilities it still values its relationship with America as a key partner in this field