Prosperity7, a Saudi Arabian fund part of Aramco’s venture capital arm, has invested $400 million in Zhipu AI, a generative AI start-up in China. This marks a significant foreign investment in China’s AI sector and showcases Saudi Arabia’s growing influence in the Chinese tech ecosystem amidst US regulatory pressures.
A Saudi Arabian fund, Prosperity7, part of state-owned oil group Aramco’s venture capital arm, invested around $400 million in China’s generative AI start-up Zhipu AI, according to individuals familiar with the transaction. The investment values Zhipu AI at approximately $3 billion and marks the first major foreign investment in China’s domestic AI efforts, which have been constrained by U.S. funding restrictions.
Zhipu AI, headquartered in Beijing’s Haidian district with over 800 employees, focuses on offering “AI-in-a-box” solutions for enterprises. The funding round also included domestic backers such as Alibaba Cloud, Tencent, and state investors, including the National Social Security Fund.
Prosperity7’s involvement highlights Saudi Arabia’s growing influence in the Chinese tech ecosystem as U.S. investors step back due to regulatory pressures. This investment collaboration aligns with broader efforts by Saudi state investors to secure new capital and markets, evidenced by other tech ventures and partnerships, including a $2 billion convertible bond deal with Chinese PC maker Lenovo.
Amid tightening U.S. export controls and investment bans on China’s AI sector, some foreign investors have reduced their stakes under American pressure. However, Prosperity7 has expanded its presence in China, contrasting with other global funds’ retrenchments. Future investments may further develop this new strategic alignment between Saudi and Chinese technology sectors, despite global geopolitical tensions.
