Saudi Arabia’s efforts to position itself as a global AI hub took another stride forward in May with the launching of Humain, a state-owned AI company that aims to provide state-of-the-art AI solutions to governments and businesses around the world.

Funded and owned by the Saudi Public Investment Fund (PIF), Humain aims to lead the next wave of a global tech revolution by building the entire AI infrastructure under a single umbrella. The company’s core marketing pitch is clear. “We combine human judgment with AI execution to build systems that get things done – faster, smarter, and at scale,” it says on its website.

It’s fair to say almost every other AI company around the world claims to do exactly that. So what makes Humain different? The answer comes straight from the horse’s mouth. “We build the entire AI stack: data centres, cloud, models, and applications. So you don’t have to piece things together,” the company says.

That is a unique advantage to have. Depending on external vendors and third-party service providers slows things down. Governments and businesses would rather have all services provided on one single platform than having to deal with various stakeholders.

The launch is also a significant milestone in Saudi’s transition from an oil-dependent economy to a hub for advanced technologies and regional connectivity. Prince Mohammad Bin Salman seems keen to make it another jewel in the crown as he pushes to modernize a country, and a society, that still holds onto its traditional fabric despite its massive wealth.

The project

The ambition, from the very start, is to bring together four key components of the AI infrastructure, including Infrastructure, Cloud, Data & Models, and Applications, and make them all run in sync. And there has been a lot of work happening in the background on each of those components over the past few years.

For example, last September the country announced that construction work had commenced on 187 megawatt (MW) Desert Dragon Data Centres with the help of Chinese firms. The Saudi Gazette reported at the time that the facility “will be available to global customers, offering services from cloud hosting to artificial intelligence.”

On the hardware front, the Financial Times reported in May that the firm had agreed a multibillion dollar deal with US chipmaker Nvidia to buy AI chips for its data centres.

“HUMAIN is making a major investment to build AI factories in the Kingdom of Saudi Arabia with a projected capacity of up to 500 megawatts powered by several hundred thousand of NVIDIA’s most advanced GPUs over the next five years,” Nvidia said in a press release.

Another key part of the deal includes Nvidia training and providing hands-on-experience to Saudi citizens on “advanced AI, simulation, robotics and digital twin technologies,” the US firm has said.

And for the technology, Humain recently struck a $10 billion dollar deal with Google Cloud which will see the US tech giant deliver technology and infrastructure across the AI sector in the Kingdom.

The two sides have agreed to “build and operate a global artificial intelligence (AI) hub in Saudi Arabia” which will “enable AI-powered innovation and growth for Saudi and American companies doing business in the region,” Google said in a press release.

The investors

The Public Investment Fund remains to be the main financial force behind many of Saudi’s mega-projects, and is expected to make the initial investment of billions of dollars in Humain. But the company has already shown ambition to attract investment from abroad, including from some of the largest US tech-giants over the coming years.

In an interview with the Financial Times last week, the company’s chief executive, Tareq Amin, said he had spoken to a number of US firms “including OpenAI, Elon Musk’s xAI and Andreessen Horowitz” about its ambitious plans.

“We are in discussions with all of them. Some of them, which you will hear about very soon, are massive names in the data centre segment,” Amin told the paper.

Agreement on AI and advanced technologies was also one of the key outcomes of President Trump’s visit to the Kingdom nation in May this year. A White House statement said: “Google, DataVolt, Oracle, Salesforce, AMD, and Uber are committing to invest $80 billion in cutting-edge transformative technologies in both countries.”

The company aims to use its sister venture capital fund, Humain Ventures, to raise investments for its own operations but also invest in startups around the world. And there are already positive signs. Last month, the company announced a strategic partnership with US chipmaker Nvidia “to drive the next wave of artificial intelligence development.”

Nvidia said: “The two organisations will leverage NVIDIA platforms and expertise to establish Saudi Arabia as a global leader in AI, GPU cloud computing and digital transformation to drive innovation and growth worldwide.”

The ambition

As oil prices continue to drop in global markets, Saudi Arabia is keen to diversify its economy and move away from over-reliance on natural resources. Investing in the next wave of advanced technologies, especially AI, seems to be a profitable alternative for the Gulf nation.

The country’s strategic location at the nexus of multiple components can allow large quantities of data to be transferred and processed faster and more easily. It can also use its vast deserts to build state-of-the-art data centres, and has the energy resources required to power them.

Regional rivalry also plays its part, with Prince Mohammad Bin Salman keen to compete with other smaller cousin nations such as the UAE and Qatar.

Last September, the UAE and the former Biden administration signed key agreements in different areas of AI, including ethical research and innovation, safety, security and trust, alignment of regulatory frameworks, cooperation in cybersecurity, facilitation of investment opportunities, clean energy, and sustainable development.

Soon after, Saudi Arabia announced the launch of Project Transcendence, a $100 billion dollar project which will focus on “investing in data centers, startups, and other infrastructure crucial for AI development.

Saudi policymakers are well aware, too, of the global rivalry between the US and China in developing and utilising advanced technologies, including AI.

There seems to be a strategic desire on part of the Kingdom to position itself between the two global powers, strike deals with both sides and benefit from remaining neutral, independent and open for business with the rest of the world.

The challenges

While the ambition seems impressive on paper, Saudi Arabia certainly faces a number of challenges, both internal and abroad, in fulfilling it. For example, the country is building its entire AI infrastructure from scratch. As it takes its time to build that, other competitors will keep making advances.

Alex Harrowell, principal analyst in advanced computing for AI at Omdia, asks a key question. “if you were wondering where to host your AI project, would an unbuilt Saudi project grab you as opposed to, say, Amazon Web Services’ facilities in Germany?”

According to Harrowell, this leaves Saudi Arabia in a weaker position, constantly reliant on partnering with the US, and therefore constantly having to appease the US.

Saudi Arabia will also have to convince US officials as well as the tech industry that key technology or hardware, such as AI chips, do not end up in the hands of US rivals such as China.

Also, the lack of a comprehensive regulatory framework on AI could pose challenges in the future, especially when dealing with European investors or clients.

The country’s AI Ethics Principles, issued by the Saudi Data and Artificial IntelligenceAuthority (SDAIA) in September 2023, is a key piece of legislation dealing with AI. However, the principles are not legally binding and there isn’t enough evidence to assess whether it matches other international regulatory standards.

There will also be questions around the ethical application of AI, and the sovereignty of the technology. Some experts question whether a closed-system such as Saudi Arabia can provide enough transparency on the storage, usage and potential manipulation of large amounts of very sensitive data.

Saudi’s poor human rights record and a lack of democracy and transparency could also potentially repel certain governments, especially in Europe, from either investing in or buying AI solutions from the Kingdom.

Lastly, there are also questions around funding. The Kingdom certainly has enough money to kick-start a mega project like Humain. However, with dropping oil prices and an ever-increasing government debt and economic deficit, long-term funding and investment could be a challenge.