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An Aramco venture capital fund has invested in a Chinese rival to OpenAI: Prosperity7 , a unit of Aramco’s venture capital arm, Aramco Ventures, has taken a minority position in a USD 400 mn round raised by Chinese AI start-up Zhipu AI, the Financial Times and Bloomberg report.
What gives? “The Saudis don’t want Silicon Valley dominating this industry,” one source close to the fund told the Financial Times.
In context: There are dueling impulses at work here. Saudi in general (and Aramco in particular) has been carefully pursuing closer ties with China, which has been on a drive to get more involved in regional affairs. China is Aramco’s most important markets, whether you’re talking crude sales, refining capacity, or petrochemicals.
But the US has made it clear that it doesn’t want Mideast firms deepening the involvement with China’s tech sector. We believe the Washington and Riyadh are negotiating not two, but three pacts — security and defense, aid for the nuclear power industry, and a third agreement on cooperation in AI and advanced technologies. The latter would include a pledge to bias toward US tech.
Case in point: The UAE’s G42, after balancing between the US and China, ultimately cast its lot with US tech.
Sound smart: Zhipu AI is one of four big Chinese AI outfits (the others are Moonshot AI, MiniMax and 01.ai) that has so far been very reliant on state funding and Chinese cloud infrastructure given US curbs on the industry.
