Gulf-backed AI firms face hurdles despite billions in funding

AI firms that have raised billions of dollars from Gulf sovereign wealth funds and state-owned companies are running into trouble.

Many are discovering the pitfalls of required local partnerships and the difficulty of building and running data centers in the region, The Information reports.

AI chipmaker Groq, for instance, got a $1.5 billion commitment from Saudi Aramco but later had to cut its revenue projections because of the lack of data capacity in the region.

Rival Cerebras made what proved to be onerous concessions to Abu Dhabi’s G42 as part of a $300 million investment deal, the online news platform said.

In spite of the problems, foreign AI companies continue to seek cash from the Mideast’s biggest funds, The Information said.