Middle East’s AI Champions Are Drawing Firepower From Oil Giants

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(Bloomberg) — Oil giants in the Middle East are taking a more direct role in using the region’s oldest resource to finance a multibillion-dollar bet on a new one: Artificial intelligence. 

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Saudi Arabia’s Aramco and the United Arab Emirates’ state energy company Abu Dhabi National Oil Co. have ramped up work with their countries’ national AI champions, using petrodollars to meet the growing need for capital in the race to lead the technology.

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The most recent example came from Riyadh, where Aramco acquired “a significant minority stake” in Humain, Saudi Arabia’s new AI firm that’s owned by the Public Investment Fund. In Abu Dhabi, Adnoc founded and owns 49% of AIQ, which uses supercomputers to develop AI applications for the oil giant. The rest is held by a portfolio company of G42, chaired by Sheikh Tahnoon bin Zayed Al Nahyan — who oversees a $1.5 trillion empire that includes two sovereign wealth funds.

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The moves indicate that the Gulf’s AI pivot has backing from the highest levels of government, while spotlighting oil’s critical role in helping diversify economies away from hydrocarbons. Aramco and Adnoc account for much of the states’ income, with a bulk of their revenues going to national sovereign wealth funds. This is then deployed across strategic sectors including AI, meaning they already play a part in the countries’ capital outlay. 

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The Humain deal gives Aramco a more direct role. Down the road, oil companies expect to be beneficiaries of the technological advances they are financing in the first place, according to Georgia Adamson, technology fellow at the Washington-based Institute for Progress. 

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“Adnoc and Aramco are among the most important players in realizing the Gulf’s AI ambitions — from financing state-controlled AI investment vehicles to serving as key AI adopters,” she said. “The immense capital that Adnoc and Aramco have at their disposal give the UAE and Saudi Arabia permission to take hugely risky bets on AI, and the financial padding if these investments fall through.”  

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National AI Champions

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Humain is led by Tareq Amin, the former chief executive of Aramco Digital, as well as a slew of former executives from the unit.

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He was picked for the role as Aramco Digital was seen as a bright spot in the kingdom’s AI ecosystem, particularly after its partnership with Silicon Valley’s Groq Inc. Other entities, including the Saudi Data & Artificial Intelligence Authority and Saudi Company for AI, have been carved into Humain, allowing Aramco great influence in shaping the kingdom’s AI push.

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Those efforts are transforming where state oil companies see their roles in the economy evolving.

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“We think of ourselves as a technology company delivering energy,” Aramco CEO Amin Nasser said earlier this year. Aramco has saved about $6 billion over the past two years by using AI and digitalization and will invest about $2 billion in the digital arm over the next three years, Nasser said this week.

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Humain’s Chief Strategy Officer Steve Plimsoll said in June that his company is “Aramco of the AI Age.”

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The kingdom’s objective is to be the world’s third-largest AI infrastructure provider, behind the US and China, Humain’s Amin said this week during an address at the Future Investment Initiative summit in Riyadh.