Saudi Aramco and US-based Alphabet, parent company of technology firm Google, are understood to be undertaking preliminary talks to build a technology hub in Saudi Arabia, according to a report by Wall Street Journal.
The report, which cited unnamed sources familiar with the transaction, did not specify details such as the scope and size of investment required by the intended technology hub although it did say that the plan involves building “data centres around Saudi Arabia.”
The report also indicated that the joint venture could be big enough to become listed on Saudi Arabia’s stock exchange.
In December last year, UK-based news agency Reuters reported that Apple and Amazon, considered global rivals of Alphabet, were engaged in licensing discussions with Riyadh on investing in Saudi Arabia.
It is not the first attempt of Saudi Arabia in recent years to play a more visible role in the technology arena.
In 2016, Saudi Arabia’s sovereign Public Investment Fund invested $3.5bn in US-based ride-hailing service Uber. Last year, PIF also announced investing $45bn on Japan-based Softbank’s $100bn Technology Fund, which aims to finance new developments in artificial intelligence, mobility and self-driving cars.
Both investments mark a departure from the fund’s historical preference for conservative, or low-risk, low-return assets.
Ahmed al-Faifi, managing director of technology firm SAP in Saudi Arabia, Bahrain and Yemen, earlier told MEED that PIF’s investments in technology ventures is aligned with the kingdom’s drive to diversify its economy.
“Investing in high-risk, high return technology assets potentially offers direct benefits to PIF as well as indirect benefits to the Saudi economy, as it would allow them access to new technologies that can be utilised to productively transform traditional sectors,” Al-Faifi said.
Saudi Arabia has also explicitly stated that the $500bn Neom project will seek to attract investments in nine different sectors including robotics.
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