The Scene
Fielding a question from Chinese state media on Sunday, a senior government official from Saudi Arabia touted a “great wave” of scientific innovation emerging from China, and pledged the two countries would further deepen their ties, Xinhua reported.
The press conference in Riyadh kicked off LEAP, a major technology event, earlier this week. In the days since, a flood of deals have been announced to bring Chinese robotaxis, laptops, AI models, and data centers to the kingdom — while putting the competition for tech dominance between China and the US into stark relief.
Once viewed only as a source of capital, today Saudi Arabia is enticing technology companies to come and do business. Crown Prince Mohammed bin Salman is pouring billions of dollars into developing a domestic tech ecosystem under his Vision 2030 program, even as some mega-projects are delayed. The young, gaming- and smartphone-obsessed population has a huge appetite for apps and computing power.
The Gulf “is of vital importance for China’s tech outreach,” James Kynge, senior research fellow for China and the world at Chatham House, told Semafor. “It is a really important focal point for China to show the whole world, not just the region, that its tech is often better to buy and to operate than US tech. It’s a crucial node that shows the world that Chinese tech can go around the world and out-compete American tech.”
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The View From Beijing
In a departure from business strategies of the past, this current cohort of Chinese companies has a mandate to expand internationally, according to academic Karim Alwadi, based in Beijing.
The Gulf is an attractive destination as a gateway market to the Global South as well as a place to draw capital, Alwadi said in an interview. State-backed funds and family offices have an appetite to co-invest, which can reduce the heavy cost burden of high-tech industries, and is something that isn’t available in China, he added. “People don’t appreciate how big this is, it’s a tsunami,” he said. “Ride the wave.”
Know More
The deals announced this week highlighted an array of AI-centric products and services: WeRide will add more robotaxis in Riyadh (up to 10,000); Public Investment Fund’s HUMAIN has commissioned an Arabic-language model from China’s MiniMax; and China’s Tencent Cloud secured a Saudi operating license to serve clients in government and finance, a move that will build on $150 million the tech giant has invested so far in the kingdom. Meanwhile, hardware maker Lenovo is on track to begin mass production of a laptop (unveiled at LEAP) in Riyadh by the end of the year.
The industry is still dominated by US companies: AWS, for one, is building $5.3 billion worth of data centers in the kingdom. And as part of a deal to secure export licenses for advanced chips from the US government, HUMAIN will not allow Chinese frontier AI models to be trained on its compute capacity. Instead, its CEO said the firm will offer access to Chinese open-source models on its Saudi data centers.
“The march of Chinese technology, particularly in areas like AI and telecoms, is spreading through the Global South very quickly,” Kynge said. “Saudi Arabia will be a model. They’ll look to Gulf countries and say, ‘we want that: cheap, high tech, and the Chinese are on it.’”
Notable
- In a dance between investment and domestic growth, HUMAIN will tie checks to computing power in Saudi Arabia as it plans its new, massive venture capital fund, its CEO told Semafor.
- Chinese EV maker Rox Motors has started making cars in Abu Dhabi and plans to unveil its first UAE-designed car next year, AGBI reported.