Saudi Fund Sells Shares in AI Chip Startup Backed by OpenAI’s Altman

Prosperity7, a fund launched by the Saudi oil group in 2022, was instructed to exit its investment in Rain AI, which designs chips inspired by how the brain works. Altman is listed as a backer of the company on Rain AI’s website.

Prosperity7’s website confirms it has exited its investment.

The Committee of Foreign Investment in the United States (CFIUS), which reviews deals for national security implications, ordered the Saudi fund to sell its shares at some point over the last year, the report added. 

It comes amid concerns over China’s growing links with Middle Eastern countries, and Saudi Arabia in particular. Prosperity7 has invested in a number of Chinese startups.

The U.S. intervention further highlights the Biden administration’s concerns over Chinese access to U.S. artificial intelligence technology. In October, the government tightened restrictions on exports of state-of-the-art AI chips, such as those developed by
Nvidia
(NVDA), to China.

Separately, Altman was in the process of raising money to set up an AI-focused chip company to compete with
Nvidia
shortly before he was fired, and then reinstated as OpenAI CEO, according to reports. He traveled to the Middle East to raise funds, the South China Morning Post reported. It’s unclear if Rain AI is linked to those efforts in any way.

“CFIUS is committed to taking all necessary actions within its authority to safeguard U.S. national security,” the U.S. Treasury, which oversees the committee, said in a statement reported by Reuters. It added that the committee does not comment publicly on transactions it may or may not be reviewing.

Altman, Saudi Aramco, and the U.S. Treasury Department did not immediately respond to a request for comment early Friday.

Write to Callum Keown at [email protected]