Saudi Arabia to invest $2bn in Chinese laptop maker Lenovo

In return, Lenovo pledged to open a manufacturing facility and establish a regional headquarters in Saudi Arabia. 

Saudi Arabia’s plan to invest $2bn (€1.85bn) in Chinese laptop maker Lenovo is the latest example of a strategy to use the kingdom’s cash pile to lure foreign companies and become the Gulf’s tech hub.

Alat, a unit of the powerful Saudi sovereign wealth fund, said that it would invest in a Lenovo convertible bond. In return, the Chinese computer maker pledged to open a manufacturing facility and establish a regional headquarters in Saudi Arabia. 

The kingdom said it expects its investment to create 15,000 direct jobs locally, and add $10bn to GDP by 2030.

Attracting foreign investment has become a key focus for the country under Crown Prince Mohammed Bin Salman and his plan to diversify the oil-dependent economy. It’s also part of an unfolding rivalry with the neighbouring United Arab Emirates to dominate the tech industry in the region, a race that also includes data centres and artificial intelligence.

Saudi Arabia’s $1tn Public Investment Fund (PIF), which has become a prominent tech investor in recent years, is increasingly using its heft to require foreign companies to invest in Saudi Arabia in return. 

With $100bn to spend, the PIF’s Alat unit looks set to become a powerful force to further these goals. It can offer money to firms willing to help its ambitions to make Saudi Arabia a powerhouse in electronics manufacturing. 

Earlier this year, it announced a string of deals, including partnerships with SoftBank Group and a Chinese surveillance equipment maker to set up local manufacturing facilities.

The UAE has struck its own deals, winning an investment from Microsoft for state-backed Abu Dhabi artificial intelligence start-up G42 last month. 

A deal to give BlackRock $5bn earlier this year was predicated on the US asset manager building a Riyadh-based team to manage it and invest it in the Middle East. An earlier investment in electric carmaker, Lucid Group, led to the company opening a plant on Saudi Arabia’s west coast. 

Reuters