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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 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 severe challenge. Like most countries in West Asia, Saudi Arabia is investing heavily in developing an indigenous AI model. In such a situation, China is 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 explicitly designed for Arabic and developed in Abu Dhabi. This indicates that most prominent players in the region are on the verge of a 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 racing to acquire a boatload of NVIDIA’s AI GPUs, the A100 and the H100. Since then, Analytics Magazine India 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, had bought over 3000 high-performance AI chips from NVIDIA at $40,000 a piece for $120 million. Several such organizations have equally deep pockets to shell 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 blocklist due to national security concerns. This meant that Huawei could no longer openly access several technologies and components required to make a high-performance silicon chip.

And yet, just half a decade after Huawei was blocked, it came out with one of the most sophisticated SoCs that the world has seen. This was a solid 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 its own Chat-GPT rivals from the likes of Alibaba, Weibo, Tencent, and several other tech companies.

China got to display its AI prowess to the world again when Huawei Technologies recently launched a cloud data center in Riyadh to expand its online services in the Middle East and North Africa.

This Riyadh-based facility is Huawei’s 30th global cloud data center 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 center shows the company’s tech prowess and China and Saudi Arabia’s evolving relationship.

Furthermore, if Huawei’s Mate 60 Pro is anything to go by, China 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 is 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 it is no longer a problem. Saudi Arabia, in 2020, announced that they will invest over $20 billion by 2030. China is the perfect partner for Saudi Arabia’s AI ambitions.

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