- Saudi AI firm Alat would divest from China if the US requests it, CEO Amit Midha told Bloomberg.
- Saudi Arabia has been pouring billions into AI and semiconductor initiatives in an attempt to become a major hub.
- Concerns have grown that Middle Eastern ties offered China a way to access advanced technologies.
A new state-backed Saudi Arabian fund centered on semiconductor and AI technology has guaranteed that it would divest from China if Washington requests it.
"US is the number one market, US is the number one partner, and we hope we can partner more deeply," Alat CEO Amit Midha told Bloomberg during the Milken Institute Global Conference.
The firm, financed by a $100 billion capital injection from Saudi Arabia's Public Investment Fund, would have no problems pulling back from Beijing when asked:
"So far, the requests have been to keep manufacturing and supply chains completely separate, but if the partnerships with China would become a problem for the US, we will divest," Midha said.
According to Bloomberg, the US has been in talks with the kingdom to ensure its massive AI buildout doesn't bolster China's own efforts in the sector, as competition heats up between Washington and Beijing. Officials have long portrayed China's access to AI and semiconductor technology as a national security threat.
Attention has fallen on Saudi Arabia as it plows significant money into AI, all to become a major industry hub. Aside from its investment in Alat, it has partnered with Silicon Valley players for another $40 billion in AI funding, The New York Times reported.
But that's also drawn scrutiny from the US, on the worry that Middle Eastern connections in China offer Beijing a sanctions loophole. Since late 2022, Washington has targeted China with a number of technology sanctions.
US officials have already had to mandate AI firms to divest from China, such as G42. According to Bloomberg, the United Arab Emirates' company complied, keeping access to US AI systems and leading to a $1.5 billion investment from Microsoft.
For his part, Midha sees value in sticking to the US, touting that his firm can be a meaningful support in building out necessary AI infrastructure.
The firm is also planning a partnership with two US tech firms this summer, while co-investing alongside another US fund, he said. He declined to name the companies involved.