Saudi Arabia AI Chips Market Size and Forecast by Type, Node Type, End User Application, and Distribution Channel: 2019-2033

Saudi Arabia Artificial Intelligence (AI) Chips Market Growth and Performance

• The Saudi Arabia AI chips market size in 2033 will be US$ XX.49 Billion, with a forecasted Compound Annual Growth Rate (CAGR) of 31.7%.
• In terms of type classification, the primary segment expected to lead is AI processor chips, with an estimated market worth of US$ X.28 Billion by 2033.

Saudi Arabia AI Chips Market Outlook

Saudi Arabia is rapidly emerging as a significant player in the artificial intelligence (AI) chips market, driven by its ambitious Vision 2030 initiative. The Kingdom is making strategic investments in AI and semiconductor technologies to diversify its economy beyond oil dependence and establish itself as a global technology hub. With a strong focus on high-performance computing, AI-powered applications, and semiconductor localization, Saudi Arabia is positioning itself at the forefront of the AI revolution.

The Saudi Public Investment Fund (PIF) has been actively channeling resources into the semiconductor sector to develop domestic capabilities and reduce reliance on global suppliers. One of the most notable efforts is the $100 billion Alat project, which aims to enhance local semiconductor manufacturing, design, and research. This initiative is expected to establish Saudi Arabia as a competitive player in the global semiconductor landscape, which is currently dominated by Taiwan, China, South Korea, the US, and Japan.

Saudi Arabia’s commitment to AI development is evident in its large-scale investments in AI chip technologies. For instance, the Kingdom has acquired over 3,000 Nvidia H100 chips through the King Abdullah University of Science and Technology (KAUST), a move designed to bolster generative AI capabilities and facilitate advanced computational research. This strategic purchase aligns with the broader goal of creating a national AI ecosystem that supports innovation and economic diversification.

In addition to direct investments in AI chip procurement, Saudi Arabia has been forging key partnerships to enhance its semiconductor industry. At the LEAP 2024 technology conference, the King Abdulaziz City for Science and Technology (KACST) announced collaborations with leading global technology firms. These include a partnership with SenseTime Middle East and Africa to establish an AI Excellence Center for generative and general AI research, and an agreement with CDT International Limited to strengthen Saudi Arabia semiconductor manufacturing capabilities. Moreover, a collaboration with Stalyorvf Technologies focuses on electronic chip design, high-speed wireless communications, and silicon semiconductor sensing solutions.

Saudi Arabia’s strategic initiatives in AI and semiconductor technology are not only enhancing its technological capabilities but also attracting global attention. The Kingdom recently secured a $1.5 billion investment in Groq, a Silicon Valley-based AI chip startup specializing in processors optimized for pre-trained AI models. This investment supports Groq’s expansion in Saudi Arabia, particularly through its data center in Dammam, and underscores the nation’s commitment to fostering AI chip innovation.

The Kingdom’s AI strategy has gained global recognition, with Saudi Arabia ranking first in the Government Strategy Index for Artificial Intelligence, surpassing major economies like Germany and China. This achievement reflects the nation’s proactive approach to AI governance, infrastructure development, and talent acquisition. By leveraging its financial resources and strategic partnerships, Saudi Arabia is well-positioned to compete with global AI powerhouses, including the US and China.

Saudi Arabia efforts in semiconductor development and AI chip investments are further complemented by its broader vision to establish a national semiconductor hub. The Kingdom has launched a billion-riyal investment fund dedicated to supporting semiconductor companies and aims to establish 50 semiconductor design firms by 2030. This initiative is expected to create a robust semiconductor supply chain, support local talent development, and drive innovation in critical industries such as 5G, autonomous vehicles, and smart city infrastructure.

While Saudi Arabia advancements in AI chip technology present significant opportunities, they also raise ethical considerations. The rapid development of AI-powered surveillance and data processing capabilities has prompted discussions on the responsible use of AI technologies. As the Kingdom continues to enhance its AI capabilities, addressing these ethical concerns will be crucial to ensuring that AI advancements align with international best practices and human rights standards.

Saudi Arabia ambitious investments in AI chips and semiconductor technologies demonstrate its determination to become a global leader in AI innovation. By leveraging its financial strength, forging strategic partnerships, and developing domestic semiconductor capabilities, the Kingdom is making significant strides toward technological self-sufficiency. As Saudi Arabia continues to build its AI and semiconductor ecosystem, its influence in the global AI race is expected to grow, reinforcing its position as a key player in the future of artificial intelligence.

Saudi Arabia AI Chips Market Scope