AI Is Only the Beginning Of Saudi Arabia’s Leap Forward
When China-based Lenovo and year-old Saudi Public Investment Fund conglomerate Alat broke ground for a new production facility in Riyadh in February in conjunction with the fourth annual LEAP tech event, it was part of an overall $2 billion investment by the two organizations in an advanced manufacturing and technology center integrating robotics and AI.
If $2 billion sounds like a lot, consider this: A total of $14.9 billion in new AI investments were announced at the event, part of $42.4 billion in tech-related infrastructure investments made in the Kingdom since LEAP launched in 2022. Moreover, those billions are just a part of the $100 billion Alat intends to invest by 2030 to enhance Saudi Arabia’s technological capabilities.
Lenovo’s 200,000-sq.-m. (2.1-million sq.-ft.) manufacturing, R&D, innovation and customer experience site at the Special Integrated Logistics Zone (SILZ) in Riyadh is anticipated to support employment of 15,000 directly and another 45,000 in supporting industries. It joins a global network of more than 30 Lenovo manufacturing sites around the world.
“Through this powerful strategic collaboration and investment with Alat, we gain greater global presence, a strong regional foothold and the ability to capitalize on the incredible growth momentum in KSA and the wider MEA region,” said Lenovo Chairman and CEO Yuanqing Yang.
Alat’s mission involves innovating and creating manufacturing capabilities for 34 categories of products across nine business units: semiconductors, smart devices, smart buildings, smart appliances, smart health, electrification, advanced industrials, next generation and AI infrastructure. Its efforts aim to do nothing less than create 39,000 direct jobs and contribute $9.3 billion in non-oil GDP in Saudi Arabia by 2030.
“Carrier has long had a presence in Saudi Arabia and we see significant growth opportunities in the region.”
— Carrier Chairman & CEO David Gitlin, February 2024, on a new partnership with Alat that includes a 5,000-job R&D and manufacturing site
Partnerships Everywhere You Look
Positioned 15 minutes from King Khalid International Airport, the Lenovo/Alat investment — which includes a Middle East and Africa headquarters commitment from Lenovo — joins a fast-developing ecosystem that includes IBM’s pledge last year to invest $250 million in a new software development center. IBM and Lenovo also are engaged in a new strategic technology partnership “designed to help scale the impact of generative AI” for clients in the Kingdom, the companies announced.
Other AI-affiliated projects announced at LEAP included a plan by private equity firm KKR, in partnership with Gulf Data Hub, to invest in 300 megawatts of data centers; Saudi Arabia’s Salesforce investing $500 million to develop Hyperforce and enhance cloud capabilities for regional customers; and Tencent Cloud’s allocation of $150 million to establish the Middle East’s first AI-powered cloud region. But there are plenty of other partnerships afoot.
At the March 2024 LEAP event, Alat signed an agreement with King Abdulaziz City for Science and Technology (KACST). “Alat will provide support through industrial facilities and manufacturing solutions, drawing on Alat’s own advanced manufacturing hub that is being established in Saudi Arabia,” the organization stated. “Alat will work closely with KACST on talent development, to foster the skilled workforce required for semiconductor operations, and will also leverage’s KACST’s advanced technology facilities for joint research and training.”
In February 2024, Alat announced four partnerships in order to “deliver sustainable manufacturing to help these global companies reduce their emissions and move towards carbon zero manufacturing.” The details:
- “Alat and Softbank will establish a next-generation industrial automation business in the Kingdom of Saudi Arabia that will manufacture groundbreaking industrial robots. The partners will invest up to $150 million to establish a fully automated manufacturing and engineering hub that will serve local and global demand.”
- Carrier and Alat will develop a manufacturing and R&D facility in the Kingdom expected to create more than 5,000 jobs and aimed at decarbonizing emissions in buildings and dramatically increasing their energy efficiency. Carrier said the HVAC industry in the Middle East and North Africa (MENA) region is expected to become “a $10 billion addressable market by 2030.”
- Security and safety product manufacturer Dahua Technology Ltd will invest $200 million to establish a secure and compliant global business for vision-centric products, called Alat AIVisio Technology Co. Ltd., and a manufacturing facility in Saudi Arabia. Both companies will cooperate and support with technology enablement, testing labs and demo centers.
- The Saudi Technology and Security Comprehensive Control Company (Tahakom), which already develops intelligent transportation systems, AI and safety solutions, will in partnership with Alat combine their resources and capabilities to advance smart mobility and intelligent cities solutions.
The Carrier release also noted that “while the number of factories in Saudi Arabia has increased by 50% in the last year, with over 10,000 industrial facilities, the Kingdom expects to host 32,000 manufacturing facilities by 2035.”
