Saudi Arabia is mandating that leading Chinese technology companies invest in the Gulf kingdom in return for huge deals, as it leverages its petrodollar wealth to boost its domestic tech industry.
Alibaba and SenseTime are among the top Chinese groups to have secured deals worth hundreds of millions of dollars with Saudi Arabia over the past three years, in exchange for setting up joint ventures in the country.
According to five industry insiders, including fund managers, tech entrepreneurs and consultants working on the agreements, Saudi investors are applying increasingly stringent requirements to fund deals.
In some cases, Chinese companies have to share technical expertise with their new Saudi partners.
“They want your company and engineers to train their own talent,” said one Chinese consultant advising local tech companies on how to raise money from the kingdom. “It comes with strings attached.”
The kingdom’s hunt for global tech companies to help upgrade its economy and diversify away from oil has coincided with a funding crunch and weak domestic sales for Chinese tech companies, which have turned to the Middle East for investment and new revenue streams.
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