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SenseTime and other China-based technology companies are investing in local companies in Saudi Arabia, often in the form of joint ventures, in order to qualify for contracts worth hundreds of millions of dollars in Saudi Arabia, the Financial Times says. The paper reported.
The facial recognition developer also won a contract with Saudi Arabia’s megacity project Neom.
The joint venture, established in 2022, was established by SenseTime with $207 million in support from the Saudi Company for Artificial Intelligence (SCAI) to develop AI applications in the Middle East. SCAI is owned by the kingdom’s sovereign wealth fund. Terms of the agreement provide that SenseTime must buy back SCAI’s shares if the joint venture is not acquired or does not conduct an initial public offering within seven years.
The Times describes a situation in which Middle Eastern countries want to build up AI capabilities and are offering large contracts in exchange for upgrading domestic skill sets. One venture capitalist told the magazine that Chinese companies are more willing to transfer intellectual property than their European and American counterparts.
In-demand features include a heavy large-scale language model for Arabic, and SenseTime just announced SenseNova 4.0 LLM. According to the announcement, SenseNova outperforms his GPT-3.5 in overall performance and is being used to power the new Office Raccoon data analysis application.
Chinese investors say it is now typical for Saudi Arabian venture funds to keep 30% of their spending on projects within the kingdom.
SenseTime appears to have met these requirements in its joint venture with PIF. According to SenseTime MEA’s LinkedIn post, the joint venture has signed a memorandum of understanding with education program Mawhiba to provide online training and “Mawhiba’s AI-focused enrichment program for students.”
Saudi Arabia’s investment standards are reminiscent of China’s policy of requiring local partners for foreign companies bidding on domestic contracts.
Article topics
AI | China | Investment | Research and Development | Saudi Arabia | Sense Time | Smart City
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