Middle Eastern funds plowing billions into the hottest AI start-ups [Video]

Sovereign wealth funds out of the Middle East are emerging as key backers of Silicon Valley’s artificial intelligence darlings.

Oil-rich nations like Saudi Arabia, United Arab Emirates, Kuwait and Qatar have been looking to diversify their economies, and are turning to tech investments as a hedge. In the past year, funding for AI companies by Middle-Eastern sovereigns has increased fivefold, according to data from Pitchbook.

MGX, a new AI fund out of The United Arab Emirates, was among investors looking to get a slice of OpenAI’s latest fundraise this week, two sources told CNBC. The round is set to value OpenAI at $150 billion, said the people, who asked not to be named because the discussions are confidential.

Few venture funds have deep enough pockets to compete with the multibillion-dollar checks coming from the likes of Microsoft and Amazon. But these sovereign funds have no problem coming up with cash for AI deals. They invest on behalf of their governments, which have been helped by rising energy …