Saudi to invest $20 billion in AI by 2030 amid slumping crude prices
RIYADH: Saudi Arabia announced yesterday it will invest $20 billion in artificial intelligence projects by 2030, as the oil-rich country seeks to diversify its economy amid slumping crude prices.
RIYADH: A picture taken on Wednesday shows an electronic billboard bearing the portraits of Saudi King Salman bin Abdulaziz (right) and his son Crown Prince Mohammed bin Salman ahead of a meeting of Finance ministers and central bank governors of the G20 nations in the Saudi capital Riyadh tomorrow. – AFP
The kingdom, the Arab world’s biggest economy, launched an artificial intelligence strategy last month to attract investors as part of Crown Prince Mohammed bin Salman’s ambitious “Vision 2030” plan to wean the kingdom off oil.
“Saudi Arabia will invest $20 billion from now until 2030,” said Abdullah Al-Ghamdi, head of the Data and Artificial Intelligence Authority, which was established in 2019. “We aspire to have artificial intelligence as a component of an alternative economy through startups and innovation companies… and view artificial intelligence as a source of savings and additional income,” he said during a G20 media briefing.
The Saudi government has provided state-owned Saudi Arabian Airlines (Saudia) with at least $7 billion in direct payments and other financial support in 2019 and 2020, company documents show, as the carrier struggles with losses and the coronavirus pandemic.
The finance ministry approved a payment of 13.6 billion riyals ($3.6 billion) for Saudia in 2019, and a further 6.4 billion riyals in the first half of this year, according to the documents reviewed by Reuters. Saudia has struggled for years and the pandemic, which has brought global aviation to its knees, has added more pressure on its finances. The amounts, labeled as “government compensation”, include government payments for services.
Saudi Arabia in March suspended flights and banned Muslims abroad from performing pilgrimages in the kingdom, which normally attract millions of foreign visitors. The kingdom has recently resumed international flights including to cities in the Middle East, Asia, Europe, Africa and the United States. Saudia is reviewing some of its contracts, including a lease agreement for 50 Airbus aircraft from Dubai-based financial services firm Alif Segregated Portfolio Company, sources familiar with the matter said.
The review prompted Alif to file a claim in London’s High Court in September over an alleged breach of the agreement, as Saudia asked for a 20 percent cut in the agreed rent and the cancellation of a government guarantee clause, court documents showed. That clause allows Alif to keep government’s guarantees if the state becomes a minority shareholder.
“As legal proceedings regarding ALIF are ongoing, it would be inappropriate to comment at this stage. However, we reiterate that Saudia will stand by its contractual commitments but will defend itself against inaccurate claims,” Saudia said. Asked if money it provided Saudia was conditional on the review of contracts, the finance ministry said it does not intervene on contractual matters regarding Saudia’s ordinary course of business.
One source familiar with the matter said the contract review was needed to clean up Saudia’s balance sheet ahead of a takeover by PIF aimed at turning round the airline. PIF declined to comment. Another source familiar with the matter said there was “no reason to believe that such a move by PIF is imminent”. Gulf carriers Emirates and Qatar Airways have also received billions of dollars in state assistance to help them in the crisis. – Agencies