Killing Them Softly: Saudi Arabia, China teaming up for AI is a major headache for US' monopoly

While the US may have a monopoly over AI as it stands today, mainly thanks to AI models from OpenAI, Google, Microsoft and Meta, there is a strong possibility that this monopoly may be short-lived.

With Saudi Arabia partnering up with Chinese AI studios and tech companies, the US’ grip over AI in general, and generative AI models faces a serious challenge. Saudi Arabia, like most countries in West Asia, is investing heavily in developing an indigenous AI model. In such a situation, China is more than happy to provide its technical expertise.

UAE’s new AI is better than ChatGPT
Recently, the UAE-based TII launched Falcon 180B, a novel artificial intelligence large language model that is designed specifically for Arabic and was developed in Abu Dhabi. This indicates that most major players in the region are on the verge of a major breakthrough in AI, as per a report by the Digital Watch Observatory.

Recent regulatory filings by NVIDIA and AMD have shown that the US is actively working to restrict its domestic tech companies from selling their high-end AI-enabling GPUs and Chips to China and West Asia, and has imposed several restrictions. However, that too might not be enough to stop West Asian countries from developing an AI model of their own.

A few days ago, we reported that the UAE and Saudi Arabia are in a race of sorts to acquire a boatload of NVIDIA’s AI GPUs, the A100 and the H100. Analytics Magazine India, has since then reported that NVIDIA has cleverly worked its way around US restrictions by providing UAE and Saudi Arabia with a slightly tweaked version of their A100 and H100 AI GPUs.

Earlier this month, we reported that just one of Saudi Arabia’s universities, the King Abdullah University of Science and Technology or KAUST has bought over 3000 high-performance AI chips from NVIDIA at $40,000 a piece for a total of $120 million, and there are several such organisations, with equally deep pockets to shell out out an obscene amount of money for GPUs.

Moreover, it seems that even if the US completely bans the sale of GPUs to Saudi Arabia and other West Asia countries, China is more than happy to step in, and play their partner.

China beats US Sanctions
In May 2019, Huawei was placed on a trade blacklist due to national security concerns. This essentially meant that Huawei was no longer able to openly access several of the technologies and components that are required to make a high-performance, silicon chip.

And yet, just half a decade after Huawei was blacklisted, it came out with one of the most sophisticated SoC that the world has seen. This was a strong message to the US — that their sanctions were merely a bump on the road.

Moreover, China has been displaying its AI prowess to the world, with the launch of their own Chat-GPT rivals from the likes of Alibaba, Weibo, Tencent and several other tech companies.

China got to display their AI prowess to the world again, when Huawei Technologies recently launched a cloud data centre in Riyadh, as part of its efforts to expand its online services in the Middle East and North Africa.

This Riyadh-based facility is Huawei’s 30th global cloud data centre and is poised to strengthen government services in Saudi Arabia. Additionally, it will function as a pivotal platform for advancing AI applications and language models specifically designed for the Arabic language.

Huawei’s Riyadh data centre not only shows the company’s tech prowess but also China and Saudi Arabia’s evolving relationship.

Furthermore, if Huawei’s Mate 60 Pro is anything to go by, China certainly has the prowess to supply GPUs to West Asia and Saudi Arabia. As for Saudi Arabia, the country possesses the financial resources to engage the services of the Chinese tech giants and reduce its dependence on US suppliers like NVIDIA and AMD.

Saudi Arabia’s resources
Saudi Arabia is actively pursuing the development and investment in AI initiatives, but it faces a hardware infrastructure challenge, primarily relying on the United States for crucial components. Presently, NVIDIA stands as the sole provider of GPUs essential for training LLMs. Even China’s Baidu depends on NVIDIA for its GPU supply.

The thing is Saudi Arabia makes $1 billion from oil exports every single day. Both Saudi Arabia and the UAE have experienced a boost in their financial resources due to the windfalls from petrodollars following last year’s surge in energy prices. These two countries also oversee some of the world’s largest and most active sovereign investment funds.

As with anything, you throw that kind of money at any problem, and sure enough it is no longer a problem. Saudi Arabia, in 2020 announced that they will invest over $20 billion by 2030. Clearly, China is the perfect partner for Saudi Arabia’s AI ambitions

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