Home > News > Asset Allocation > Saudi PIF Nets $17B in Gains in 2023, Reversing Prior Year Slump 
Asset Allocation

Saudi PIF Nets $17B in Gains in 2023, Reversing Prior Year Slump 

The sovereign wealth fund’s assets grew to nearly $1 trillion.
By Matt Toledo



Saudi Arabia’s Public Investment Fund rebounded in 2023, netting a profit of 64.4 trillion riyals ($17.176 billion), according to an audit report from KPMG. The sovereign wealth fund has yet to release its comprehensive annual report for 2023.

Assets of the fund grew to nearly $990 billion at the end of 2023, up from $925 billion in 2022. Revenues doubled to $88.3 billion year-end 2023 from $44 billion in 2022. 

The Saudi fund had reported a loss of $16.5 billion in 2022, mainly attributed to unrealized losses from investments in Softbank’s Vision Fund, the multinational’s venture capital unit, as well as losses in the technology sector that resulted from that year’s market downturn.

The PIF is investing in a number of ambitious projects, including tens of billions of dollars to turn the country into an artificial intelligence and semiconductor hub, as well as multiple planned cities as part of Neom, an urban area under development that is part of the country’s Saudi Vision 2030 initiative, which aims to diversify the country’s oil-rich economy.  

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The fund saw its biggest increase in revenue in 2023 from gaming and media, a sector in which it has invested more than $40 billion, with revenues to the fund increasing nearly tenfold year over year to 7.898 billion riyals in 2023 from 806 million riyals in 2022. 

The fund also benefited from dividend payments by Saudi Aramco, the kingdom’s oil company. Earlier this year, the Saudi government transferred an 8% stake in Aramco to the PIF, doubling its stake to 16% in a bid to increase the assets of the fund. The PIF has a goal of becoming a $2 trillion fund by 2030.

According to Global SWF, the PIF was the biggest spender amongst its peers in 2023, deploying $31.6 billion of capital into investments, the highest of any sovereign wealth fund that year. 

Related Stories: 

Saudi Arabia Transfers 8% of Aramco to Wealth Fund

Saudi Arabia’s Public Investment Fund Was Biggest Spender Among Peers in 2023

Saudi Arabia’s PIF Reports $16.5B Loss in 2022

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Home > News > Risk > Forget the Terminator: How to Prevent Harm From AI
Risk

Forget the Terminator: How to Prevent Harm From AI

Allocators should insist that companies adopt firm principles to thwart privacy problems, false information and other threats from ascendant artificial intelligence, study says.

By Larry Light

Along with the much-expected benefits from generative artificial intelligence are worries about the harm it could bring.

This fear falls far short of deadly dystopian scenarios such as the “Terminator” movies. The worry is more about privacy violations, patent infringement, false information, job disruptions and security weaknesses, among other things. All could devastate investments.

As such, warned a report by the World Economic Forum and the CPP Investments Insight Institute (the research unit of the Canadian Pension Plan), institutional investors should insist on “responsible AI principles” designed to mitigate the downside of this daunting technological advance.

“Large investors can and should exercise the influence afforded by their capital to promote the use of RAI in their portfolios, in their work with investment partners, and in the ecosystem at large,” wrote Cathy Li, head, AI, data and metaverse, member of the executive committee, World Economic Forum, and Judy Wade, managing director and head, strategy execution and relationship management, CPP Investments, in the report’s foreword.

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Few doubt that AI will have a huge impact on investing. A 2023 McKinsey & Co. report concluded that AI will add from $2.6 trillion to $4.4 trillion annually to the world economy at some unspecified point in the future.

A Boston Consulting Group survey of asset managers, conducted with the Investment Company Institute and the CFA Institute, found that 72% believe GenAI will have a significant impact on their organizations within three to five years. But just 16% have a strategy for capitalizing on the changes and are adopting it.

The principles the WEF and CPP study urged were not “a technological upgrade, but a strategic imperative.” In other words: Better and smarter AI will not thwart any problems; only humans can, using an agreed-upon strategy to enhance the good of AI and cast out the bad.

The result will be improved revenue and profits, according to the report. An AI that performs well and everyone has confidence in “can increase customer trust and, therefore, engagement and retention,” per the study. So then, it went on, AI will be able to protect brand safety, boost sales, aid in competitive bidding and enhance pricing power.

How should asset owners go about propagating good AI principles? By “engaging with boards of portfolio companies” and ensuring that the directors and managements follow through, the WEF-CPP paper advocated. Plus, it declared, the allocators should enlist other owners as allies in this quest.

Asset owners “can encourage investment partners to adopt AI governance in their own operations and extend it into their holdings,” according to the report. Thus, “over a longer period, investors’ efforts can help create an ecosystem where the benefits” of AI principles are “well understood and adoption is ubiquitous.”

The report called for a collaboration among the private sector, academia and government to “help speed up the development of these tools.” Along the way, investors and companies need to continually keep abreast of AI advancement to ensure that the principles remain in force, the study contended.

“For investors looking toward the horizon of long-term value creation, advancing RAI is a strategic business decision,” the authors concluded.

But, the report cautioned, investors must avoid “the temptation to develop and deploy AI rapidly in pursuit of short-term gains,” treating principles “as an afterthought rather than a forethought.”

Related Stories:

How Investors Are Utilizing Artificial Intelligence

How to Invest in the Future of Artificial Intelligence

Goldman: Artificial Intelligence Will Boost Global GDP by 7%

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