Saudi Arabia Unveils First AI-Only Startup Fund with Red Sea Global

Editorial Team

Last updated 7-01-2026

3 min

Red Sea Global and Bunat Ventures launch Saudi Arabia’s first AI-focused investment fund.

The fund supports 25 AI startups, providing real-world testing opportunities at tourist developments.

Red Sea Global aligns this initiative with sustainability and digital transformation goals.

It aims to attract global AI startups, tightening ties with investors, universities, and tech partners.

Saudi Arabia’s rapid progress offers a fertile environment for AI innovation and growth.

Red Sea Global has teamed up with Bunat Ventures to roll out what’s being described as Saudi Arabia’s first investment fund dedicated purely to AI startups — and I have to say, for a country moving at breakneck speed on tech, this feels spot on. The fund will back AI-native companies from their earliest days right through to growth stage, with plans to support around 25 startups over the next three years. That’s not a small number, especially when you consider how tricky it can be for early founders to find patient capital that truly understands artificial intelligence rather than treating it like a buzzword.

What caught my eye, though, is the promise of giving these startups access to Red Sea Global’s huge tourism developments — essentially turning them into living laboratories for testing new tools in real-world settings. Anyone who’s ever tried building operational tech for hospitality knows it can be, well… a bit of a faff without actual environments to trial things in. So this move could give founders a real leg-up. And believe it or not, this is something we at Arageek hear startups dream about all the time: having a sandbox that isn’t just theoretical.

Sultan Moraished from RSG highlighted that the partnership ties into the group’s broader push for sustainability and digital transformation. It’s interesting to see tourism operators thinking of AI not just as a flashy add-on but as something that could drive long-term efficiency and environmental gains. On the flip side, I reckon the real test will be whether these young companies can scale fast enough to keep up with Saudi Arabia’s ambitions — the pace there can be almost unforgiving.

Bunat VC’s chief, Khaled Zainalabedin, spoke about creating a “strong platform” for the next generation of AI entrepreneurs, and you can sense the confidence behind that. The fund isn’t only for local founders; it also aims to attract global AI startups to set up regional bases in the Kingdom. If that works, it could help tighten the weave between investors, universities, and tech partners in the country — something every ecosystem needs but not every ecosystem manages well.

Meanwhile, Red Sea Global continues to expand its destinations, with ten luxury resorts now open and its own airport connecting Riyadh, Jeddah, Dubai, and Doha. Shura Island has also started welcoming guests, complete with new international hotels and an 18-hole golf course that looks like it was designed for Instagram. It’s the kind of infrastructure that makes you think, no wonder they want startups to plug in and innovate there.

All in all, it feels like a well-timed push — ambitious, yes, but not ungrounded. And if the pieces fall into place, this could be one of those moments people look back on and say, that’s when the AI scene in Saudi really took off, even if the whole journey wasn’t always as smooth as one might imagin.

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