Saudi Crown Prince bin Salman courts Korean AI startups as Riyadh, Abu Dhabi vie to build tech hubs

Back in the 1960s and 1970s, the Middle East was a land of opportunity for many South Korean construction workers, who labored there under the scorching sun to earn oil money.

Fast forward several decades, and the region is once again emerging as a land of opportunity for the Korean business circle.

This time, Koreans are not begging for jobs. It’s countries like Saudi Arabia and the United Arab Emirates that are rolling out the red carpet for Korean artificial intelligence startups, as they bet big on their post-fossil futures.

From Riyadh’s futuristic city of Neom to the high-rise sprawl of Abu Dhabi and Dubai, Gulf nations are ramping up their pursuit of AI technologies, positioning themselves as the world’s next AI hub.

Flush with petrodollars and bolstered by cheap electricity and low taxes, Middle Eastern countries are seeking investments in and partnerships with Korean AI startups.

“Saudi Arabia was once a fortress,” said a Seoul-based venture capitalist. "Outside defense and construction giants, few Korean tech firms made inroads. Now, they’re rolling out the red carpet.”

MR. EVERYTHING’S AMBITIONS

Humane, an AI company set up by Saudi Crown Prince Mohammed bin Salman, recently identified 10 Korean AI start-ups for potential equity investment and project collaboration, in some cases offering up to $2 million per company.

Sources said on Tuesday that Saudi officials will visit Seoul next month to formalize these discussions – a reversal for a region long seen as impenetrable for smaller Korean firms.

Behind the shift is a regional strategy to pivot from oil to algorithms.

Saudi Arabia’s Vision 2030 and the UAE’s National AI Strategy 2031 call for full-scale adoption of advanced technologies to fuel post-carbon growth.

The Saudi leader, dubbed “Mr. Everything” for his astronomical wealth and broad range of business portfolios, launched Humane in May through the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, to look for investment opportunities in the AI sector.

The PIF is raising $10 billion in an AI-focused fund.

KOREAN AI STARTUPS REAPING REWARDS

At this year’s GITEX, the Middle East’s largest tech fair held in Dubai, more than 70 Korean AI firms showcased their tech prowess.

The UAE’s AI minister met with several Korean AI businessmen to discuss future applications ranging from autonomous driving to medical diagnostics, industry officials said.

Notable Korean players are already reaping rewards.

In January, Rebellions Inc., a Korean AI chip design startup, deployed test servers at the data center operated by state-run oil and gas giant Saudi Arabian Oil Co., better known as Aramco.

FuriosaAI, another fabless Korean chip designer, is undergoing benchmarking of its latest AI chip, RNGD, with regional clients.

Seoul-based Nota AI, which specializes in edge AI and smart surveillance, is in discussions with Abu Dhabi’s transport authority to supply AI-powered traffic cameras to municipalities in the UAE.

Souce said officials from Wa’ed Ventures, a venture capital firm backed by Aramco, recently visited Korea and met with major domestic startups.

Last year, Wa’ed invested 20 billion won ($15 million) in Rebellions.

“Wa’ed was happy with its investment in Rebellions. They are looking for a second Rebellions now,” said an official at Korea’s Ministry of SMEs and Startups.

AI GOLD RUSH

Gulf states boast some of the lowest electricity prices globally thanks to abundant oil, gas and solar energy. Analysts said this makes them ideal for AI training infrastructure and power-hungry data centers.

“These are environments where AI development costs can be cut dramatically,” said an industry official.

Major Middle Eastern sovereign wealth funds increased their AI investment fivefold last year compared to the previous year.

According to Seoul-based Global ICT Portal, the number of AI companies registered in Abu Dhabi has increased by an annual average of 67% over the past three years.

The UAE ranks near the top in AI talent inflows, according to Stanford’s AI Index. It has also established institutions like Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) to build a domestic base of researchers and engineers.

Saudi Arabia, meanwhile, has established an AI academy in collaboration with Stanford University.

“The Middle East wants to build its own AI stack,” said an AI startup executive in Seoul. “If we move fast, there’s a chance for us to be at the foundation of that ecosystem, not just a contractor down the line.”

Write to Eun-Yi Ko at koko@hankyung.com

In-Soo Nam edited this article.