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Tech Partnership Dynamics: Saudi Arabia's Demands in Deals with China

Tech Partnership Dynamics: Saudi Arabia's Demands in Deals with China

Saudi Arabia is demanding that Chinese tech giants invest in the Gulf kingdom in exchange for lucrative deals, aiming to bolster its domestic tech industry with its petrodollar wealth.

Alibaba and SenseTime, among others, have secured deals worth millions of dollars with Saudi Arabia, agreeing to establish joint ventures in the country. However, these agreements come with strict conditions, including sharing technical expertise with Saudi partners.

The kingdom's push for global tech companies aligns with its efforts to diversify its economy away from oil. Saudi investors are imposing increasingly stringent requirements on funding deals, reminiscent of China's past tactics.

For instance, SenseTime has secured a contract for Neom, a futuristic megacity project in Saudi Arabia. also raised funds from the Neom Investment Fund with the condition to establish operations in the country.
Alibaba Cloud entered the Saudi market through a joint venture with the Saudi Telecom Group, while SenseTime raised funds from the Saudi Company for Artificial Intelligence to develop AI solutions in the Middle East.

Moreover, Chinese investors seeking venture funds in Saudi Arabia must allocate 30% of funds to projects in the kingdom, indicating a shift from previous attitudes.

Saudi Arabia is also attracting foreign tech firms to develop its AI industry, favoring top companies from Silicon Valley or Shenzhen. However, concerns arise over potential restrictions on advanced chip exports to support projects involving Chinese researchers.

Overall, the tech deals between Saudi Arabia and China present opportunities and risks for both nations, with China's willingness to transfer intellectual property giving it an edge over Western competitors.