Saudi Arabia is planning a new artificial intelligence (AI) project with the backing of as much as $100bn, according to a Bloomberg report.

Known as Project Transcendence, the state-backed entity is envisaged to invest in data centres, startups and other related infrastructure to develop AI.

It will also focus on recruiting new talent to the kingdom, developing the local ecosystem and encouraging tech companies to invest in the Gulf state.

Related read: Riyadh AI goals require colossal mindset and capital shift

The entity is expected to set up with a structure similar to Alat, backed by $100bn in capital from the Saudi sovereign vehicle, the Public Investment Fund (PIF), and which aims to transform the kingdom into a global manufacturing hub for electronics and advanced industries.

Project Transcendence is expected to partner with large, established tech companies, with the Saudis offering help with infrastructure and capital.

According to the report, the amount invested could be between $50bn and $100bn.

An AI fund with a significantly smaller backing of up to $40bn was rumoured to be launched by the Saudi government earlier this year. However, no such launch or announcement was made during the three-day Global AI (Gain) summit held in Riyadh in September.

According to the Bloomberg report, Project Transcendence may ultimately include multiple government bodies and will aim to fund AI infrastructure and startups, as well as "bridge the kingdom’s gap with the US and China on AI expertise". 

Saudi officials are also understood to be discussing an AI entity that will turn into a national champion, at least as big as Abu Dhabi’s AI vehicle, G42.

The planned launch of Project Transcendence comes a few months after Abu Dhabi-based AI-focused investment company MGX partnered with US-headquartered BlackRock, Global Infrastructure Partners (GIP) and Microsoft to establish the Global AI Infrastructure Investment Partnership (GAIIP).

GAIIP aims to mobilse up to $100bn to meet growing demand for computing power as well as infrastructure to create new sources of power for such facilities.

AI is part of Saudi Arabia’s Vision 2030 strategy, which aims to identify new revenue sources as it diversifies away from fossil fuels.

In 2019, the government formed the Saudi Data and AI Authority (SDAIA) as the competent authority to help oversee the execution of the kingdom's AI strategy.

Since then, the Saudi government's spending on AI registered a compound annual growth rate of 59%.

The kingdom also attracted  $1.7bn in AI funding in 2023 alone, with more expected over the coming years as the likes of US tech giants Google, Amazon Web Services, Microsoft and Oracle have pledged multi-year, mutlibillion-dollar investments to build regional AI hubs in Saudi Arabia.