How Saudi Seeks to Rival the UAE Globally as A Regional Tech Partner with A New $100 Billion AI Project
Launch of "Project Transcendence"
Saudi Arabia is reportedly planning to launch a new AI initiative, "Project Transcendence," a $100 billion initiative aimed at rivalling the UAE's AI and cloud computing conglomerate G42 by investing in tech start-ups, data centres, semiconductors, and broader AI infrastructure.
Central to this move is Saudi Arabia’s goal to be a top-15 global leader in AI by the end of the decade, while bolstering its favourability for both Western nations and emerging economies, particularly the BRICS bloc.
Balancing Regime Stability and Alliances
Similar to the UAE, the monarchy in Saudi Arabia faces the challenge of solidifying regime stability amid changing political and economic alliances. By embedding itself within critical sectors of the global supply chain—specifically in high-stakes technology and defence industries—Saudi Arabia seeks to attract foreign investment and forge security agreements with key allies like the US.
A recent report indicated that Saudi and US officials are currently in discussions regarding a potential defence arrangement that doesn’t involve a broader agreement with Israel, given the current delicate political situation in the region over Gaza.
The kingdom is taking this as a step toward earning a Major Defence Partner status with the US, a designation shared only with the UAE and India. This could enable enhanced cooperation through joint training, exercises, and military collaboration between the armed forces of Saudi Arabia with the other designatories, as well as with other shared military partners, supporting US influence in the region. It will also ensure that the Saudi systems are compatible with those of the US by providing advanced defence equipment and services, while exploring potential Saudi investments in cutting-edge American defence systems.
AI Investments and IMEC Involvement
The kingdom’s AI investments include building research hubs, developing in-house large language models, and pursuing semiconductor manufacturing. These investments are bolstering Saudi Arabia’s technology infrastructure and strengthening its strategic position within the India-Middle East Economic Corridor (IMEC). As part of IMEC, the kingdom is working with Israel and the UAE to create a logistics network that facilitates the flow of data, energy, and goods across Asia, Africa, and Europe.
The new AI initiative, supported by the Public Investment Fund (PIF), is reportedly structured similarly to Alat, another PIF-backed $100 billion initiative that seeks to invest in technology and sustainable manufacturing projects.
Strategic Hedging
Like its Emirati neighbour, Saudi Arabia is balancing strategic ties with both American and Chinese technology sectors—a delicate act that could become increasingly fraught as geopolitical tensions escalate. In May, US officials reportedly asked Saudi Arabia to divest from Chinese tech companies in order to gain access to American semiconductor and advanced computing systems, due to concerns that countries like the kingdom and the UAE could potentially act as conduits for Beijing to access technology that Chinese companies are restricted from purchasing from the US.
This demand has already affected UAE’s G42, which agreed to pivot away from certain Chinese technology in return for a $1.5 billion investment from Microsoft, only four months after the Gulf country joined BRICS.
This approach signals that Saudi Arabia and the UAE’s recent involvement with BRICS is more of a strategic hedge than an outright pivot away from longstanding alliances with the US. Although China and Russia may seek to sway the Gulf nations toward a more defined partnership, both the UAE and Saudi Arabia are proceeding cautiously. For these Gulf states, BRICS provides an alternative avenue for economic collaboration and influence without compromising their core security interests or domestic stability, which remain closely aligned with US policy in the region.
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