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Saudi Defense Firm SAMI Targets $5 Bln Annual Revenue by 2030

Saudi Arabian Military Industries (SAMI) aims to generate annual revenue of $5 billion by 2030. (SPA)
Saudi Arabian Military Industries (SAMI) aims to generate annual revenue of $5 billion by 2030. (SPA)
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Saudi Defense Firm SAMI Targets $5 Bln Annual Revenue by 2030

Saudi Arabian Military Industries (SAMI) aims to generate annual revenue of $5 billion by 2030. (SPA)
Saudi Arabian Military Industries (SAMI) aims to generate annual revenue of $5 billion by 2030. (SPA)

State-owned Saudi Arabian Military Industries (SAMI) aims to generate annual revenue of $5 billion by 2030, its chief executive said on Monday, part of a drive to build more defense equipment inside the Kingdom.

Saudi Arabia set up SAMI in 2017 to cut its reliance on imported weapons and military systems.

The government aims to spend 50% of its military budget by 2030 on equipment made at home.

Chief Executive Walid Abukhaled told Reuters at Abu Dhabi’s Idex defense exhibition that SAMI aimed to be among the world’s top 25 defense firms by 2030. “Being in the top 25 companies by 2030, you’re looking at $5 billion a year” in revenue, he said.

Abukhaled, who did not give a figure for current revenues, took over as CEO in April.

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, set up SAMI as part of a broad economic program to diversify the oil-dependent economy.

Abukhaled said SAMI would sign a deal on Monday with NIMR, a company in neighboring United Arab Emirates which builds military vehicles, to set up manufacturing in Saudi Arabia.

SAMI on Sunday signed a joint venture agreement with US firm Lockheed Martin, which is involved in installing a $15 billion missile defense system in Saudi Arabia.

Abukhaled said SAMI was developing systems to counter drones, a move that would help deal with drone attacks that are frequently launched at the Kingdom by the Iran-backed Houthi militias in Yemen.

“At the end of the day our ultimate objective is to really serve the (Saudi Arabian) armed forces,” Abukhaled said.

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Saudi Arabia’s Kingdom Holding Buys $400 Million Stake in xAI

xAI logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration
xAI logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration
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Saudi Arabia’s Kingdom Holding Buys $400 Million Stake in xAI

xAI logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration
xAI logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration

Kingdom Holding Company (KHC) said on Wednesday it has acquired a key stake in xAI Corporation, an artificial intelligence company founded by US billionaire Elon Musk for 1.5 billion Saudi Riyals ($400 million), becoming the second largest investor in X and xAI.

The acquisition of the new stake is part of xAI’s Series C funding round, said KHC in its filing to Saudi bourse Tadawul.

This transaction follows KHC's previous investment at the same value in xAI during its Series B funding round.

It further solidifies KHC's strategic partnership with Elon Musk, and follows its strategic stake in X (Twitter), held since 2015, KHC stated.

A post on X said Prince Alwaleed bin Talal became the second largest shareholders in Musk’s two companies, X & xAI.

In November 2022, the Saudi prince moved almost 35 million Twitter shares through the Kingdom Holding Company, worth about $1.9 billion at the $54.20 per share sale price. That made him the “second-largest investor” in the new parent company.
Funding Rounds

The funding rounds consist of several fundraising events in which startups or existing companies raise funds from investors to continue building their infrastructure and accelerate research and development.

The rounds start with a “seed round” of funding where a startup typically raises money from the owners to cover initial operating expenses and then expand to Series A, B, and C funding rounds as the company develops to raise additional capital.

In terms of risks, Series B funding is generally less risky than Series A funding, while Series C is less risky than Series B and is typically used by companies that are growing rapidly and need additional capital to fund their expansion.

Musk's xAI Series C funding round included the Qatar Investment Authority (QIA) and the Oman Investment Authority (OIA).

Participants included Morgan Stanley and BlackRock, which were described as two of the major investors in the fundraising round.

KHC, in which Public Investment Fund (PIF) owns a 17% stake, said xAI has a $45 billion valuation with the latest funding round, indicating a significant increase from its $25 billion valuation during the Series B funding round, the filing showed.

Following the announcement of the acquisition, the shares of KHC, listed on the Saudi Stock Exchange, rose by 0.44% to 9.16 riyals.

xAI’s strategy focuses on developing leading AI models and working closely with other technology companies associated with its founder, including Tesla, SpaceX, and X, whose application has over 500 million users.

KHC said this transaction further solidifies KHC's strategic partnership with Elon Musk, and follows its strategic stake in X (Twitter), held since 2015.

It forms part of KHC’s business model of securing early stakes in emerging technologies and its ambition to lead and innovate within the AI industry, it added.