According to New York Times article later confirmed by CNBC sources, Saudi Arabia’s sovereign wealth fund is in negotiations to establish a $40 billion fund to invest in artificial intelligence with American venture capital firm Andreessen Horowitz and maybe other firms.

The plan, which has been discussed for months, would see a collaboration between Andreessen Horowitz, one of Silicon Valley’s biggest venture capital firms, and Saudi Arabia’s $925 billion Public Investment Fund (PIF). Two sources with knowledge of the situation told CNBC about the talks.

The individuals declined to be identified since they are not allowed to speak to the media, emphasising that the negotiations have not yet been concluded.

They added that, outside from Andreessen Horowitz and the PIF, they were unaware of any other possible participants in the negotiations.

CNBC’s request for comment was not immediately answered by the PIF or Andreessen Horowitz.

PIF in Saudi Arabia has been buying a lot of things in an effort to diversify the kingdom’s income sources away from oil, which is a major component of Crown Prince Mohammed bin Salman’s Vision 2030 plan. It has invested billions of dollars in joint funds and stake purchases with big global corporations like Blackstone, Uber, Bank of America, Citi, SoftBank, and Bank of America.

With $35 billion in assets under management, Andreessen Horowitz has funded numerous successful businesses, such as Airbnb, Coinbase, Facebook, and Slack. Its portfolio includes about 100 firms focused on artificial intelligence.

In June 2023, co-founder Marc Andreessen stated, “The threat of not aggressively pursuing global AI dominance… is considerable” in a blog post on the company’s website.

(Adapted from CNBC.com)

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