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Saudi Arabia is backing a $900mn funding round in US video start-up Luma AI, as the Gulf state steps up efforts to become a global force in the development of artificial intelligence.
The deal, led by Humain, the AI-focused venture backed by the kingdom’s sovereign wealth fund, values Luma at more than $4bn, according to people close to the negotiations.
The deal will be announced in Washington at this week’s US-Saudi Investment Forum, led by Crown Prince Mohammed bin Salman as part of a number of new deals with US companies. Those follow a wave of tie-ups announced during Donald Trump’s visit to Riyadh in May.
Saudi Arabia wants to use the financial muscle of its near-$1tn Public Investment Fund to become an international leader in AI. Prince Mohammed said during his meeting with the US president in the Oval Office on Tuesday that his country planned to spend about $50bn on AI “in the short term”.
Luma, which is based in Burbank, California, creates generative video models that can respond to prompts to create movies or simulate reality. The new funding will accelerate Luma’s efforts to train large-scale “world models” that learn from videos and robotic data rather than just language.
Big Tech groups such as Google DeepMind and Meta, as well as start-ups such as Fei Fei Li’s World Labs, are spending billions of dollars in the race to build these new “spatial intelligence” systems.
Amit Jain, co-founder of Luma, said: “To create AI that can help humanity in the physical world and expand our understanding of the universe, we need to build systems that can learn from a quadrillion tokens of information — roughly the collective digital memory of humanity — contained in video, image, audio and language.”
Meanwhile, Humain is building Project Halo, one of the world’s largest data centre clusters that will provide some computational power for Luma. The deal includes an initiative to build AI models trained on Arabic and regional data to create “culturally aligned” AI.
Existing investors, such as Andreessen Horowitz, Amplify Partners and Matrix Partners have also participated in Luma’s new funding round, alongside new investors including AMD Ventures.
Saudi Arabia and PIF have recalibrated their spending and priorities as lower oil prices put pressure on the kingdom’s budget in recent years. But AI remains one of the main areas where it is willing to spend as part of wider plans to diversify the economy away from its dependence on oil revenues.
Humain chief executive Tareq Amin told the Financial Times earlier this year that the company had allocated $10bn for AI investments through a venture capital fund, while it continued talks with Nvidia and other semiconductor companies to secure the chips needed to build data centres in the kingdom.