A recent report from The Financial Times revealed that a Saudi fund has become the sole foreign investor in Zhipu AI, a Chinese startup aiming to rival OpenAI. The fund, Prosperity7, is part of the state-owned oil group Saudi Aramco, and participated in a recent funding round for the startup as a minority investor.
Zhipu AI is the largest generative AI startup in China in terms of staff numbers, but has faced challenges due to growing US restrictions on Chinese AI development. Previous investors in the company include Alibaba Cloud, Tencent, and support from state investors like the National Social Security Fund. The US has imposed restrictions targeting China’s AI development, including limiting access to advanced AI chips and restricting US investment in the sector.
Tensions between Washington and Beijing have been rising over issues like AI chips, with the Biden administration reportedly considering stricter rules to prevent Chinese buyers from purchasing crucial hardware. Chinese officials have encouraged tech giants to buy domestically-made AI chips, with companies like ByteDance instructed to reduce spending on foreign-made chips.
The new investment from Saudi Arabia in Zhipu AI indicates that the kingdom may be seeking to prevent American domination of the AI industry. With major players like Meta, Microsoft, and OpenAI based in the US, the Saudis are reportedly aiming to diversify the industry and avoid reliance on Silicon Valley.
Representatives for Aramco and Zhipu AI have not yet commented on the recent investment. Requests for comment made to both companies outside of normal working hours have gone unanswered.