TechDogs-"Saudi Arabia's Prosperity7 Joins $400m Funding Round Of OpenAI Competitor Zhipu AI"

Emerging Technology

Saudi Arabia's Prosperity7 Joins $400m Funding Round Of OpenAI Competitor Zhipu AI

By TD NewsDesk

TD NewsDesk

Updated on Mon, Jun 3, 2024

Overall Rating
While artificial intelligence (AI) and generative artificial intelligence (GenAI) continue revolutionizing industries, one major concern has gripped companies, countries and governments around the world, which is that the most popular and widely used infrastructure, software and tools come from companies based in the United States of America.

ChatGPT by OpenAI, Copilot by Microsoft and Gemini by Google, all hail from the US, while other promising AI tools, chatbots generative AI models such as Grok by xAI are yet to make their marks. Furthermore, the AI infrastructure sector is headed by NVIDIA, Intel and Alphabet, which also come from the same country. 

As the US looked to maintain its leading position in the AI sector, it also imposed restrictions on US companies exporting high-capability and powerful AI chips to China, another country usually found at the forefront of technology advancements.

However, now, Zhipu AI, a Chinese AI company that rivals OpenAI, has garnered interest from a major investment company from Saudi Arabia – Prosperity7 Ventures – which is set to boost the Chinese AI sector. 

So, what was revealed between Zhipu AI and Prosperity7 Ventures? Let’s explore!
 

What Was Announced About Zhipu AI And Prosperity7?

 
  • As per a report, Saudi Arabia’s Prosperity7 Ventures, a part of Saudi Aramco, has made an investment in Chinese-based GenAI startup, Zhipu AI.

  • While the official amount remains undisclosed, the estimated investment amount is said to be around $400M from a funding round that puts the valuation of the company at approximately $3 billion.

  • While Chinese companies such as Zhipu AI and its competitors, Moonshot AI, MiniMax and 01.ai, have depended upon government funds and local technology companies to grow, this investment marks the first significant foreign backer to enter the rapidly growing Chinese AI industry.

  • Prosperity7 will participate as a minority investor, a move which will look to counter the dominance observed by US companies, especially at a time when the US has imposed trade restrictions on AI chips being exported to China.

  • This will also help Chinese AI startups access new markets, expand their reach and boost global partnerships.

  • To that point, Chinese technology company Lenovo announced it was issuing $2 billion in convertible bonds to Alat, a subsidiary of Saudi Arabia’s Public Investment Fund.

  • This will also help the company with its Middle East and Africa (MEA) expansion, while “accelerating Lenovo’s ongoing transformation, further enhance global presence and increase geographic diversification of global manufacturing footprint,” as per an official press release by the company on the move.

  • Furthermore, Lenovo will establish a regional headquarters in Riyadh and build a new manufacturing plant in Saudi Arabia.

  • On the other hand, reports find that the US is planning to and have begun reducing the export of AI chips to Middle Eastern countries, including Saudi Arabia, which is said to be a reactionary move following Prosperity7’s investment in Zhipu AI.


TechDogs-"A Screenshot Of Prosperity7 Ventures' Logo"  

What Did Stakeholders Say?

 
  • Neither Prosperity7 and Zhipu AI provided a comment on the move.

  • However, an undisclosed person familiar with the move said, “The Saudis do not want Silicon Valley dominating this industry.”

  • Furthermore, a Beijing-based tech consultant said, “The importance of Saudi Arabia to the Chinese tech ecosystem has grown so much because the US funds are not here.”


Do you think this move by Prosperity7 will encourage other venture capitalists to invest in Chinese AI companies? Do you think this move could dethrone the current US-based AI companies that are leading the AI sector?

Let us know in the comments below!

First published on Mon, Jun 3, 2024

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Tags:

Artificial Intelligence (AI)Emerging Technology Artificial Intelligence AI Generative Artificial Intelligence GenAI Prosperity7 Ventures Saudi Aramco Zhipu AI OpenAI Investment US Unites States China

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