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Saudi Arabia goes big in Davos as it seeks to become a major AI tech hub

by SuperiorInvest

A pop-up showcasing Saudi Arabia’s Neom development is among the highlights on the Davos waterfront in 2024.

CNBC

DAVOS, Switzerland — For years, the United Arab Emirates has been the tech hub of the Middle East, thanks in part to its lack of personal income tax, flexible visa policies and competitive incentives for international companies and workers.

But Saudi Arabia is eager to capture some of the limelight and talent from its Arabian Peninsula neighbor, an ambition that was laid bare on the Davos Promenade this year.

The Saudi delegation made a striking presence on the city’s main street, including a large window display dedicated to promoting Neom, a new urban development in northwest Saudi Arabia; a space dedicated to the AlUla project, an initiative that is part of the kingdom’s drive to make the heritage city a global destination for tourists; a pop-up for the Saudi Crown Prince’s Foundation, MiSK, and his young ambassadors called “majlis” – as well as two more Saudi chalets. It’s all part of the country’s Vision 2030 economic diversification strategy.

The Neom exhibition, which is one of the highlights this year on the waterfront, seeks to showcase the prospects of development as a destination not only for tourism and luxury living but also for innovation.

A Neom spokesperson told CNBC that the purpose of the expanded presence was to educate the investment community about the development and indicate that it is “open for business.”

It was a sentiment echoed Monday by the country’s finance minister. Mohammed al-Jadaan told CNBC on the sidelines of the World Economic Forum that oil, as a percentage of gross domestic product, has plummeted from 70% to the 30% to 35% range.

“That is significant,” al-Jadaan said, adding that the country has diversified into many other sectors, including tourism, technology and logistics.

His comments come amid a broader push to boost the kingdom’s profile as a global player and negotiator. In April, the capital Riyadh will host a special World Economic Forum. Al-Jadaan noted that Riyadh has “a very strategic relationship with the United States and we have a close relationship with China, and we believe we can close the gap.”

Neom is one of multiple so-called “giga” projects, which comprise Crown Prince Mohammed bin Salman’s Vision 2030 plan. Some are focused on massive investments in infrastructure, others on attracting fintech talent from the region and elsewhere.

Ian Bremmer, president and founder of Eurasia Group, a political risk consultancy, tells CNBC he was skeptical when MBS became crown prince, but now believes in the transition MBS is driving.

“It’s boosting entrepreneurship, it’s diversifying the economy… And there are a lot of people who are really interested in working in Saudi Arabia,” Bremmer said. “This is a guy who has really tried to combat a lot of visible corruption in the royal family. And more broadly, he’s actually improving education, especially for women.”

“We are now well past the Khashoggi chapter on the Kingdom,” Bremmer added, referring to the operation to capture or kill journalist Jamal Khashoggi in 2018 at the Saudi consulate in Istanbul.

Attracting talent

The Saudi economy recently eclipsed the trillion-dollar threshold for the first time. The UAE economy is half that size, just over $500 billion, according to World Bank data, although the UAE still has a fairly significant lead, with hundreds of millions of dollars invested in its technology hubs. advanced research, including centers. dedicated to generative, cybernetic, quantum and biotechnological artificial intelligence.

But the kingdom is also investing big money in its tech hub ambitions.

While much of the hype around MBS’s big investments focuses on the flashy megacities being built in the desert, regional experts in Davos tell CNBC that’s a sideshow to the main mission, which is attract talent to feed a cycle of value creation in AI.

King Abdullah University of Science and Technology, or KAUST, is led by a UCLA mathematician who came to the school to begin attracting talent to the country to help drive this innovation.

KAUST told CNBC in a statement that it is “aligned with Saudi Arabia’s goal of being a global leader in AI by 2030” and is moving toward that goal through strategic partnerships, highlighting the establishment of a National AI Strategy, which provides support to new businesses. and AI-powered government services, as well as the International Center for AI Research and Ethics (ICAIRE) in Riyadh and Saudi Aramco’s AI research center that focuses on advanced projects in oil and gas.

“KAUST contributes through its own AI Initiative and hosts the SDAIA AI Center,” the university added, referring to the Saudi Data and Artificial Intelligence Authority, which oversees its efforts in the field of AI.

Cityscape of the Saudi capital, Riyadh.

Photography by Harri Jarvelainen | Moment | fake images

Vera Futorjanski spent years living and working in Riyadh, where she was part of the team of people who initially began building the entrepreneurial ecosystem in Riyadh through the MiSK 500 accelerator.

“The big differentiator that Saudi Arabia has, which in my opinion could lead to its success on the global stage, including in the AI ​​race, is the fact that it has the necessary resources, flexibility in regulations and a large Saudi population who are young, educated and hungry for innovation,” said Futorjanski, CEO and founder of Veritas Ventures, a global strategic advisory firm.

Singapore and Israel

Jack Hidary is the CEO of SandboxAQ, a company spun off from Google’s parent company Alphabet in 2022 that applies artificial intelligence and quantum technology to key challenges in cyber, drug discovery and other areas. Hidary tells CNBC that the transformative impact of AI goes “far beyond even the mobile phone.”

“In the Emirates and in Saudi Arabia, there are millions of people who need to improve their skills, particularly Saudi Arabia, which has a much larger population,” Hidary said. “Personalized education and training powered by AI is a game-changer in this regard.”

Hidary, who was recently in Saudi Arabia, says the UAE and Saudi Arabia are looking at countries like Singapore and Israel that have supported startups and are technology-driven.

“Singapore and Israel didn’t have any natural resources, but they had the natural resource of smart people driving technology and innovation, and that’s what Saudi Arabia and the Emirates are now looking at very carefully and driving programs to make that happen.” Hidary said.

CNBC’s Karen Gilchrist contributed to this report.

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