China’s Lenovo sets up regional headquarters in Saudi Arabia

Chinese PC maker Lenovo is joining the parade of international firms responding to Saudi directives that they establish their regional headquarters in the kingdom.

The company is teaming up with Alat, a unit of Saudi Arabia’s Public Investment Fund, to build a manufacturing facility for PCs, laptops, smartphones, and servers.

Headed by Lenovo veteran Lawrence Yu, the office will aim to reinforce the Chinese company’s presence and manufacturing capabilities in the Middle East, Reuters reports.

Saudi Arabia implemented new rules this year that require international firms to establish a regional HQ in the country as a condition for receiving government contracts.

PIF-backed tech fund Alat inks $2 billion Lenovo deal

Saudi Arabia’s technology investment mega-fund Alat bought $2 billion worth of convertible bonds in Hong Kong PC giant Lenovo.

Under the deal, Alat has lured the world’s largest seller of personal computers to open a manufacturing plant to produce servers and PCs, as well as open a research center and its Middle East and Africa headquarters in Riyadh.

Launched earlier this year, Alat has previously signed partnerships with U.S.-based Carrier, Japan’s SoftBank Group and China’s Dahua Technology to build manufacturing plants in Saudi Arabia.

The SoftBank robotics plant is expected to open and assemble its first robot by year’s end.

In February, Saudi Arabia tapped ex-Dell Technologies executive Amit Midha to lead the new Public Investment Fund-owned industrial electronics company with $100 billion in backing that aims to become an AI investing and local manufacturing powerhouse.

Chaired by Saudi Crown Prince Mohammed bin Salman, Alat is targeting the creation of 39,000 direct jobs in Saudi Arabia and a $9.3 billion contribution to GDP by 2030.

The company is eyeing 30 product categories including robotics, computing and digital entertainment, as well as advanced heavy machinery. 

Alat willing to cut China ties to win U.S. trust, CEO says

Saudi Arabia’s new $100 billion investment fund Alat wants to win the trust of both U.S. tech and government leaders.

Following up on the political terms that paved the way for Microsoft to invest $1.5 billion last month in Abu Dhabi-based artificial intelligence firm G42, Alat CEO Amit Midha says Saudi Arabia is willing to sell its China holdings if asked by Washington.

“So far the requests have been to keep manufacturing and supply chains completely separate, but if the partnerships with China would become a problem for the U.S., we will divest,” he told Bloomberg in an interview on the sidelines of the Milken Conference.

Midha said Alat, which is focused on AI and semiconductors, will announce partnerships with two U.S. tech companies by the end of June, and will co-invest alongside a U.S. investment firm. He did not identify the companies.

Saudi Arabia taps ex-Dell executive as CEO for new PIF manufacturing company

Saudi Arabia has tapped an ex-Dell Technologies executive to lead the recently formed Public Investment Fund company Alat, an industrial electronics company with $100 billion in backing that aims to become a local manufacturing powerhouse. 

Global CEO Amit Midha will lead the ambitious plans for the new manufacturing hub in the kingdom. Chaired by Saudi Crown Prince Mohammed bin Salman, Alat is targeting the creation of 39,000 direct jobs in Saudi Arabia and a $9.3 billion contribution to GDP by 2030. The company is launching with more than 30 product categories including robotics, computing and digital entertainment, as well as advanced heavy machinery. 

Alat, which will officially open for business on Feb. 20, also has a sustainability component and plans to work with global companies to reduce their emissions and move towards zero-carbon manufacturing.

“We will passionately use technology to transform business,” Midha said in a statement on Tuesday, adding that Alat’s “mandate is to transform the global industries of electronics and advanced industrials by creating a sustainable manufacturing hub leveraging the Kingdom’s solar, wind and green hydrogen clean energy.”

Midha comes to Riyadh from Singapore, off the back of a nearly 17-year career at Dell, which he joined when the Red Rock, Tex. company was the world’s biggest PC maker. Fierce competition in personal computing and the global recession of 2008 threatened Dell’s future and spurred one of the biggest corporate turnarounds of the century. 

Today, Dell continues to be a large manufacturer of personal computers and laptops, but has expanded its scope to data management and storage over the last 15 years. Midha was part of that evolution, leading Dell’s growth in Asia-Pacific and Japan, overseeing a multi-billion-dollar business with a focus on digital cities.

At the helm of Alat, Midha is set to lead the kingdom’s biggest bet to date on “Made in Saudi Arabia” advanced technology components – including chips.  

Saudi Arabia’s investment in artificial intelligence and Internet of Things for smart cities is driving demand for millions of microprocessors and controllers. Greenfield sites like mega-project NEOM, and large-scale transformation plans for existing cities like Riyadh and Jeddah are significant opportunities for the country to manufacture smart electronics and reduce dependence on foreign imports, Carrington Malin, a technology strategy consultant who advises executives and governments from his base in Dubai, told The Circuit. 

“The challenge is the size of the ambition,” he said. “The country doesn’t have much of an electronics ecosystem to build on. So building out this new sector will require both a carefully planned ecosystem that will connect with other local, regional and global ecosystems over time, and cherry-picking the most productive, highest value short-term investments.”

The Saudi government has a broad target for attracting foreign investors.

The PIF and its portfolio companies have brought in $25.6 billion worth of investments in under three years, according to its Governor, Yasir Al-Rumayyan. The kingdom has set a goal to derive 65% of its GDP from private business activities by 2030, Al-Rumayyan said at the Private Sector Forum in Riyadh on Wednesday.