| The Information is hosting an event on the impact of AI on the IPO market in San Francisco on November 14th, with speakers from NYSE, Citi and J.P. Morgan. How is the IPO market shaping up for tech and what will AI's impact be? More details & request an invite here.
Welcome back! Few conferences are able to gather a more powerful group of finance and tech moguls than Saudi Arabia's sovereign wealth fund, which sponsors the annual Future Investment Initiative, also known as "Davos in the Desert." This year's conference, held this week in Riyadh, has so far featured Elon Musk, SoftBank's Masayoshi Son, Ben Horowitz, TikTok CEO Shou Zi Chew, Uber co-founder Travis Kalanick and a host of CEOs from major firms including Blackstone, Citadel, Goldman Sachs and Apollo Global Management. It should come as no surprise that many of the event's conversations have centered on the rapid rise of artificial intelligence. "It's going to be powering a tremendous investment boom," said BlackRock CEO Larry Fink in one interview, which was recorded. Jack Hidary, CEO of an Alphabet AI spinout, SandboxAQ, summed up the theme most efficiently: "The mantra of AI or die is real." Keep reading for highlights from Musk's, Horowitz's and Son's sessions. Naturally, the growing importance of Saudi Arabia's burgeoning economy was also a major focus of discussion among the Saudi leaders present. Public Investment Fund Governor Yasir Al-Rumayyan, while sitting between Fink and Alphabet President and Chief Investment Officer Ruth Porat, announced that the sovereign wealth fund planned to downsize its international investments, potentially dealing a blow to the funds and companies that often look to the Middle East for capital. There's no reason to panic yet. While Al-Rumayyan said PIF would decrease the portion of its international investments to between 18% and 20%, down from 30%, he also noted that the absolute dollar amount invested overseas continues to grow alongside PIF's assets under management. PIF now manages $925 billion, up from $764 billion at the end of 2023, according to its 2023 annual report. Still, Al-Rumayyan remarked, "There is a big paradigm shift for how PIF is deploying investments" as it refocuses on its domestic economy. Elon Musk In a 22-minute virtual interview, the SpaceX and xAI founder touched on many of his favorite topics, from collapsing birth rates to colonizing Mars. In typical Musk fashion, he also offered a wild prediction: "By 2040, there will be more humanoid robots than there are people." Those robots will retail for about $25,000, he said. "Assuming we are on the good path of AI, I think we will be in a future of abundance." Musk concluded his segment by offering support for Republican presidential contender Donald Trump, explaining that he believes humans are more likely to reach Mars before the end of the decade if Trump wins next week. "The biggest impediment to progress that we're experiencing is…overregulation," he said. "It takes longer to get a permit to launch than to build a giant rocket. And the bureaucracy in the U.S. has been growing every year and has particularly grown under the Biden administration." Ben Horowitz The co-founder of Andreessen Horowitz cautioned investors and entrepreneurs about the shifting bottlenecks in AI, drawing a parallel to the bandwidth bottleneck of 1999 during the early era of the internet. "We had the biggest bandwidth shortage in the world in 1999 and the biggest bandwidth glut ever in 2001," he said. "Already we've seen the price of Nvidia chips this year drop in half," he added. "If you are financed with Nvidia profits, then you're probably good, but if you're financing a data center with a lot of debt, you could lose it. You could get upside down very fast, so you have to really be thoughtful about that." Masayoshi Son The CEO of SoftBank Group alluded to his next big investment in artificial superintelligence—AI that is much smarter than the human brain—predicting its arrival by 2035. "I had to save some money for the big fight for the big opportunity," he said. "Now I'm saving tens of billions of dollars so I can make [my] next big move." Son declined to give specifics about where this money will be invested but implied it would be at the intersection of AI and robotics, which he believes will create a "tremendous product." Certainly one of the most notable comments for venture investors came from the Saudi official. While the kingdom's leaders have made clear they want to do more direct investments in AI startups, as I reported early this year, they've also signaled repeatedly they want more of their investment dollars to return to the country. For a start, they've put more pressure on the U.S. funds they back to reinvest some of that money in Saudi startups. We're likely to see PIF continue to invest in the U.S. venture capital funds it's already backed, but the window for VC funds to get major PIF backing for the first time may have closed. A new era of investment priorities has begun. | 
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