"Alat": Powering a Quiet Manufacturing Revolution in Saudi Arabia
TL;DR. If you only have a few minutes to spare, here's what you should know about Alat :
Here's a simple thought experiment for your inner economist: Imagine you are the chief economist of a country that derives 80% of its GDP by selling a single commodity to global markets. One fine day, you are tasked with reducing this skewed dependency on that particular commodity to less than 50% over the next 15 years, while growing your country's GDP at a rate faster than the global average.
What would you do?
The Great Brent Freefall of 2015 and the Genesis of Alat
What if this wasn't merely a thought experiment? What if it was a historical reality? An inflexion point precipitated by a series of seemingly unrelated, but crucial events that occurred over a decade ago?
On a cold, windy morning in Vienna in November of 2014, the 166th meeting of the OPEC ended with The Conference deciding against cutting oil production. Brent had suffered one of its harshest declines in recent times, and at the time of the announcement, the benchmark crude was trading around US$70/barrel, a 40% decimation from the highs of US$110/barrel from only a few months ago. Conventional wisdom would dictate that OPEC subsequently cut production to boost oil prices. Strangely though, OPEC marginally increased output in the latter half of 2014 and throughout 2015.
This puzzled observers.
Why would OPEC manufacture a supply glut in the face of declining prices? More so, why do this at a time when the global economy was teetering and demand for oil was sluggish?
The answer lay halfway across the world in the US, where oil production from shale formations using hydraulic fracturing, commonly known as fracking, was now reaching an inflexion point. Up until mid-2014, fracking was still a relatively expensive way to get oil out of the ground, with break-even prices hovering in the vicinity of US$80/barrel. This made "fracked" oil rather expensive relative to oil drilled from conventional wells in other parts of the world.
However, something changed in 2015.
With scant few buyers for the expensive oil from fracking, the industry reacted to an existential crisis by completely reinventing itself throughout the early 2010s. From breakthroughs in drilling technologies to using automation and real-time data, fracking operators increased production rates and rapidly flattened their cost curves. Changes were so dramatic that by the end of 2015, the break-even price for shale oil plummeted to a very competitive US$50 - US$40/barrel.
A classic prisoner's dilemma scenario ensued.
OPEC wanted to decimate the competition from shale before it became a credible threat to its near monopoly. In one of the most ruthless displays of pricing power, OPEC decided to maintain output in the face of declining oil prices, flooding an already saturated market with an unprecedented oversupply of low-cost crude. Other oil-producing countries such as Iraq, Venezuela, and Libya, their political turbulence notwithstanding, continued to pump oil aggressively to maintain their national revenues, exacerbating the situation.
While this was playing out, the global economy was slowing down. Lower economic activity meant a lower demand for oil. Plummeting demand and a production oversupply never really go well, and the inventory pile-up led to a massive oil supply glut, crashing global oil prices to a precarious US$30/barrel in January 2016 - a drop unseen in the decades before.
With this rather depressing context, let's return to our thought experiment, which, by the beginning of 2016, had snowballed into a very real crisis for Saudi Arabia. For the first time in decades, the 2016 Saudi budget recorded a deficit triggering reforms of scale previously unimaginable (the 2016 budget deficit was almost US$98 billion). Among all the chaos, a realisation was quietly settling in amongst Saudi policymakers - the era of expensive oil was well and truly over. If the Kingdom was to reinvent its economy, diversification from oil was not an option; it was the mandate.
In April 2016, the Kingdom's Crown Prince unveiled the Saudi Vision 2030 with a simple and clear objective: wean the Saudi economy away from the dominant oil-based revenue and diversify into completely new sectors that will fuel economic and societal growth for the next few decades.
PIF: The Kingdom's Investment "Archimedes Lever"
A disruptive transformation of this magnitude needs two key ingredients to fall in place quickly: (a) a structure that allows for centralised, rapid decision-making and (b) Access to a near-unlimited pool of liquidity that can finance such a nation-scale transformation.
Both these objectives were completed in the opening gambit of Vision 2030. The first was implemented with the establishment of the Council of Economic and Development Affairs, or the CEDA. Replacing the erstwhile Supreme Economic Council (SEC), CEDA streamlined decision-making by consolidating all the key financial and social ministries within one umbrella organisation under the direct oversight of the Crown Prince.
The second was formalised with the reorganisation of the Public Investment Fund (PIF). Originally established in 1971 and funded by the government's oil revenue, the PIF was housed within the Ministry of Finance to finance domestic infrastructure and development projects within the Kingdom. As a part of the Vision 2030 reorganisation, the PIF was brought under the CEDA and restructured into the Kingdom's sovereign wealth fund, transforming itself into a global investment powerhouse. Over the next decade, the PIF systematically went about making both domestic and international investments, collecting stakes in several international investment vehicles and building an impressive portfolio of high-growth companies - including, as we will now see, Alat.
A (Hypothetical) Investment Memo
Every investment firm has a ritual. The entire team sits around and reviews investment memos on promising companies they wish to invest in. It's usually periodic: many firms do it every week, and some may opt for a fortnightly cadence. A large part of an investment memo focuses on the opportunity, although substantial attention is paid to underlying risks. While it's difficult to read through the investment case PIF officials drew up for Alat, it's possible to speculate what it would have looked like.
The opportunity is clear and present: As a part of our Vision 2030, we have significant active investments in infrastructure, metal and mining, entertainment, telecom and media, and technology in various stages of development within the Kingdom.
For example, Ma’aden, or the Saudi Arabian Mining Company, is now the largest publicly listed mining company in Saudi Arabia and the Middle East. Its increasing business expansion in phosphate, aluminium, and fertilisers indicates substantial capital expenditure over the next few years. Likewise, both Neom and Red Sea Global, are real estate investments of unprecedented scale, each aiming to build pathbreaking real estate infrastructure by 2030.
Each of these domestic investments will need machinery and industrial equipment that is currently dominated by non-Saudi manufacturers. Insourcing manufacturing of these heavy engineering and industrial equipment will significantly de-risk these investments. To augment the sizeable domestic opportunity, there is international demand for these machinery and equipment too.
Then, there is the Saudi Company for Artificial Intelligence (SCAI), which is building enterprise and consumer solutions for energy, healthcare, and financial services sectors and future smart cities. Initiatives of this scale will need communications systems and advanced computation and networking equipment to be built and scaled successfully to meet their goals by 2030.
There is clearly a need for an entity that builds partnerships with manufacturers to serve these vital sectors afoot in the Kingdom. Through this entity, we can offer these partners material benefits that can't be replicated anywhere else in the world.
That entity will be Alat and it will sit right at the centre of this massive infrastructure jigsaw puzzle with a very clear value proposition to its future manufacturing partners:
#1: Decarbonize your manufacturing operations: A vast majority of manufacturers across the world have publicly committed to their net-zero goals. A very small percentage of those actually have a plan to achieve them. Alat’s proposition can be simple: set up your manufacturing in the Kingdom, and we will assure you an abundant supply of renewable energy that can help you meet your net-zero goals.
#2: Derisk your supply chains: Global supply chains have been fragile in recent times. Whether that's due to calamitous weather or geopolitical reasons, this risk is here to stay. With the Kingdom's unique location, we are best positioned to provide an ideal "second manufacturing base" to our manufacturing partners, and Alat can facilitate that.
#3: Deleverage your balance sheets: Companies always welcome smart capital. For manufacturers looking to rationalise their balance sheets to either restructure existing debt or issue fresh equity to finance an expansion plan, Alat can help our manufacturing partners with a variety of practical financing options.
The memo was perhaps approved on priority because the company emerged from stealth on February 1, 2024, when the Crown Prince officially announced its launch. But details remained scant. For instance, very few startups are seeded with a capital of US$100 billion and can attract leadership drawn from veteran operators and deal-makers from across the world. Fewer still are able to ink partnerships with the likes of Softbank and Lenovo to set up facilities in a manner that’s the manufacturing world equivalent of spinning up a virtual machine on a cloud server.
Alat's challenges are non-trivial. But its access to both talent and capital is unparalleled. Given the bonafides of Alat's Board of Directors and the quality of its executive leadership, no challenge seems likely to be unsurmountable. It will be fascinating to see how things unfold with various theses articulated above, but a reasonable set of hypotheses for each of Alat's strategic pillars can surely be drawn.
#1: Decarbonise Manufacturing
Your net zero goals are farther than they appear in your ESG reports.
Imagine you are the Chief Sustainability Officer of a large, multinational manufacturing organisation. Back in 2020, the CEO publicly announced that your company would be “net zero” by 2050. Everybody from the Board to analysts lauded the move. ESG was not merely lip service but a living actionable item on the executive team’s agenda. However, there was one problem – your organisation only had a net zero commitment; not a net zero plan. And although you had an approximation of your Scope 1 emissions, there was no baseline audit of your Scope 2, let alone Scope 3 emissions.
What do you do?
Accounting for carbon emissions, or broadly speaking, Greenhouse Gas (GHG) emissions, is a complex topic. Not only do you need to account for emissions from your own operations (known as Scope 1 emissions), but also from the operations of the energy sources you use to power your buildings and factories (known as Scope 2 emissions) and the emissions resulting from your customers using your product or services (Scope 3 emissions).
Scope 1: If you’re a manufacturer, Scope 1 is all direct emissions from your owned or controlled sources. These include all the manufacturing and assembly activities you carry out in your factories, storage and shipment-related activities in your warehouses, and the heating and cooling of your buildings.?
Scope 2: This is the emission that’s generated indirectly from the generation of electricity that you consume, for example, the grid power you use at your factories and offices. You don’t have any control over these Scope 2 emissions apart from controlling who (and sometimes, when) you purchase electricity from.
Scope 3: All other indirect emissions that occur in your organisation's value chain and in the use of the products you sell count for Scope 3 emissions. For example, if you’re a crude oil refining company, the emissions from the use of refined petroleum count for your scope 3 emissions.
Source: The above emission scope definitions are paraphrased from Ampol’s Future Energy Strategy.
While some emissions categories are within your control, others seem completely dependent on your customers’ and vendors’ energy choices. The fundamental question still remains though:
How do you control and minimise emissions across scopes?
Every product – from the screen where you’re reading this article, to the last pizza you had – has what’s known as a Product Carbon Footprint, or PCF. This includes emissions from sourcing raw materials and packaging products, running production equipment, and transporting the product to you. It also includes all emissions generated as you use the product and finally ends at accounting for emissions generated during the product’s disposal. Think of it as the "carbon cost" of the manufacturer producing and delivering the product to you, followed by your usage and eventual disposal of the product.
At the risk of oversimplifying the analogy, let's try it out on the pizza example. The PCF of the consumed pizza would be the sum of emissions from the fuel used to fire up the oven, the carbon emitted in the flour mill to produce the raw wheat for its dough, emissions from the vehicle that transported the wheat and other toppings from their respective sources to the pizzeria, and of course, the emissions produced in delivering the pizza to your home for an enjoyable dinner. For the sake of completeness, we must also include the emissions from the garbage collection vehicle that turns up in the morning to collect the discarded pizza delivery box. You get the idea.
A Case for "Carbon Tax"
While your local pizzeria may not yet be tracking its emissions, it is a material problem for manufacturers of products with high "carbon intensity" - goods whose manufacturing and transportation causes material CO2 and other GHG emissions.
Driven by the Paris Agreement to combat climate change, several countries, notably in the EU, brought about regulations to transition to a low-carbon economy. While a few manufacturers responded by commercialising new low-carbon manufacturing technologies, others merely shifted their carbon-intensive operations to jurisdictions with weaker (or even absent) carbon regulations. As a result, emissions didn’t actually decrease, they just shifted to another location. This undesirable consequence of climate regulations, commonly known as “carbon leakage” needed to be plugged, and policymakers in several countries proposed a carbon tax on imports of high carbon-intensity goods.
One such framework that has received recent attention is the European Union’s Carbon Border Adjustment Mechanism (CBAM) tax, which forces importers of high carbon-intensity products to disclose the embedded emissions (or the PCF) in their imports. Simply put, if manufacturers anywhere in the world use dirty fuel to manufacture their goods, their buyers are going to have to pay a premium to keep using it.
Right now, this carbon tax applies to high carbon-intensity products such as cement, steel, fertilisers, and aluminium. But soon, it is going to percolate down to products that businesses use more frequently: laptops, servers, air-conditioning, and stationery. Therefore, manufacturers using renewable sources of energy will end up being more competitive simply because they will be able to outprice the ones using conventional fossil fuels.
A Renewables Deluge
As a country that lies in the middle of the so-called "Sun Belt", Saudi Arabia is naturally endowed with solar energy capacity that may possibly outstrip the Kingdom's equivalent in fossil fuel reserves. Usually, the PV-solar potential of a region is measured by a couple of sunlight-related parameters. The first is the average number of hours of sunlight the region receives and the second is the solar irradiation, or the average solar energy received per unit area over a specified period of time (a day, month, or year).
Saudi Arabia averages a daily sunlight of 8.9 hours/day and an average solar irradiation of 250 W/sqm versus the average global highs of 100 - 200 W/sqm, putting the Kingdom within the top 10 PV-solar regions globally.
Some estimates put the total annual potential for solar energy generation at approximately 34 Kilo-petajoules per year. Burning a barrel of oil produces approximately 6 gigajoules of energy. By that comparison, the annual solar generation potential in Saudi Arabia is equivalent to burning around 15 million barrels of oil per day.
Ditto for wind power - the average on-shore wind speed in the Kingdom is more than 7 m/sec, well above the standard economic viability speed, putting initial estimates of wind energy generation potential in the Kingdom at around 600 petajoules per year.
There's potential and then there's actionable intent to realise that potential. The renewables boom in Saudi Arabia is not merely a pipedream. Earlier this year, in June 2024, the Ministry of Energy issued a contract to survey an area of 850,000 square kilometres to identify 1,200 sites - An area so massive that, if visualised as a square, each side would be 920 kilometres - roughly the distance from Munich to London.
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These sites will house weather stations that will measure the solar intensity and wind velocity and identify the best potential sites for developing solar and wind-powered renewable energy. With current instrumentation, it takes anywhere between 18 and 24 months to collect reliable data and allocate land for renewable energy projects. That is expected to come down to a few weeks. With site-wise time series data, financing these renewable projects becomes easier because the data reduces the perceived risk of these projects, bringing down the cost of capital for these renewable energy projects.
How does all this help Alat's manufacturing partners?
The answer lies in the GHG accounting approach for Scopes 1, 2, and 3 emissions. With an almost unlimited supply of renewable energy, Alat's manufacturing partners can nearly eliminate certain scopes and dramatically reduce others.
The first pin to get knocked off is Scope 2 emissions. When the energy source powering a production line is derived entirely from renewables then scope 2 emissions contributing to the product's PCF stand at zero. How does one trace that? Well, with new smart-grid instrumentation, electricity consumers can now record data about the source of energy pumping electricity into the grid. A time series of such generation input data can be extracted at a point closest to consumption and then stored on a decentralised database providing the provenance of energy for traceability purposes.
Far from a theoretical proposition, Lenovo's deal with Alat solidifies this argument.
[The Kingdom of Saudi Arabia] KSA is entering a new era of clean energy and has a goal to produce 50% of electricity from renewables by 2030. In support of that goal and Lenovo’s own 2050 net-zero target, Lenovo will be able to contribute to this vision and at the same time benefit from KSA’s clean power and sustainable manufacturing initiatives to help reach its own targets.
It was also a point that Nick Reynolds , Alat's Global CMO made in one of his recent articles where he talks about individual consumers like you and me, becoming more conscious about the embedded emissions in the products we use, and how likely that knowledge is going to influence our choices.
A similar argument holds for the reduction in Scope 1 emissions. The renewables boom will bring about changes to electric vehicles in the freight and logistics sector, slashing down carbon emissions in the transportation of raw materials and finished goods. The same renewable energy would power other resources within production and warehousing facilities - everything from handling resources such as forklifts to warehouse automation systems would run on renewable energy and dramatically shave off Scope 1 emissions from the products' carbon footprint.
Which manufacturer wouldn't want that?
Let's connect these dots further. At the Milken Institute Conference on May 6 this year, Alat announced an "Electrification" business unit that will focus on transmission and distribution technologies for a "renewables-first" energy generation capacity. Plans are afoot to develop technologies for hydrogen generation and compression that will work alongside and use the same grid. Eventually, these solar and wind farms are going to power more than just Lenovo's assembly plants and Carrier's manufacturing facilities - they will power the data centres running massive GPU clusters for a vast number of local industrial and commercial AI use cases and eventually address a massive elephant in the room - the carbon footprint for AI training and inferencing. But that's a topic for another day.
#2: Derisk Supply Chains
In March 2021, one of the most dramatic modern maritime incidents unfolded in the Suez Canal - An almost half-a-mile-long container ship called the "Ever Given" ran aground the canal and got lodged diagonally across the waterway. The incident blocked the Suez passage for six days, causing further chaos in a pandemic-stricken world than was needed.
Halfway across the world, and two years later, another disruption hit global trade when record low rainfall in the region of the Panama Canal caused a drought causing a queue with wait times of up to 20 days for some ships. These events weren't just a logistical nightmare (which they definitely were) but a stark reminder of how interconnected - and fragile - supply chains are. This is a risk that every manufacturer understands, hedges against, and eventually turns helpless in the face of such black swan events.
But let's look at a more sinister variety of supply chain risks. Those that can cripple half the world, or worse, bring its entire functioning economy down. These are systemic risks that simmer over decades and oscillate with shifts in global power polarity. They are also inevitable. You either consider your location a boon, or a curse, depending on your viewpoint and prevailing national interests. The inevitability comes from the fact that it's impossible to lift and shift a mass of land from one part of the world to another. It's for these reasons that supply chains are often considered as the forcing function in global trade, and nothing exemplifies it better than the Malacca Strait.
The Malacca Dilemma
If locations across the world were to participate in "The Weakest Link", a popular game show, the Malacca Strait would be the first to get eliminated. A narrow channel of sea located between the Malay Peninsula and the Indonesian island of Sumatra, the Malacca Strait is probably the most important maritime route for global trade - and also its most vulnerable chokepoint.
Take a hypothetical longitude running north-south through the Malacca Strait, and a very simplistic image of the global manufacturing capacity emerges. One doesn't need to be a geopolitical expert to deduce that the bulk of global manufacturing today is located in the East of Malacca, and the largest end markets for those goods are located in the West of Malacca.
Japan, South Korea, and Taiwan, located further northeast of the Strait, are global leaders in semiconductors, robotics, and precision manufacturing. Likewise, Vietnam, Thailand, and Malaysia specialise in electronic assembly, automotive parts, and textiles. Ports such as Shanghai and Shenzhen are vital links for shipping manufactured goods globally, much of which passes through the Malacca Strait en route to Europe, South Asia, and Africa.
This skew in supply and demand introduces the so-called Malacca Dilemma that evokes an equal measure of fascination and dread amongst global trade experts, geopolitical observers, and foreign policymakers across the world.
In a hypothetical scenario of a man-made or natural blockade of the Malacca Strait, the entire global trade would suffer an irreparable setback. The movement of raw materials (like oil and iron ore) headed eastward, and finished goods shipped westward would grind to a halt causing chaos of unimaginable proportions.
The option to set up a base in a location far away from such a potential maritime chokepoint is an appealing one for manufacturers and Saudi Arabia can provide that. In fact, this seems to be a deliberate strategy encoded in Alat's organisational structure. A closer look at its various business divisions reveals sectors such as Semiconductors, Smart Devices, Smart Appliances, and Advanced Industrials - giving enough evidence for Alat's ambitions to attract sectors that have built such concentrated manufacturing capacities in the east of Malacca.
Non-obvious Supply Chain Risks
Supply chain risks aren't restricted to the movement of raw materials and finished goods. There's that small matter of a long list of government approvals, permits, and exemptions. For example, how easily can a manufacturer acquire a litigation-free parcel of land? How many bureaucratic hoops must an application pass through to get commercial utility connections, approvals from environmental and pollution control authorities, waste disposal permits, and so on - a checklist that can fill reams of paper. Usually, one ends up running from one government department to another. Savvy operators hire an agency to do all that.
With Alat, the Saudi government has likely eliminated such irritants for its manufacturing partners. Several governments promise the dream of a single-window approval mechanism but with Alat, the probability of that eventually working is quite high.
Add to this a capital arsenal of US$100 billion, and it quickly becomes obvious how Alat can make an offer that few can refuse.
#3: Deleverage Balance Sheets
To understand a strategy, look at the precedent. In this case, to understand Alat's investment strategy, look at its Lenovo investment that concluded in May 2024.
The Strategic Collaboration, alongside a proposed US$2 billion Investment in zero coupon convertible bonds (“Bond Issue”), provides Lenovo with greater financial flexibility to implement its proven strategy [...]
Let's deconstruct this deal where Lenovo agreed to issue what are known as "convertible bonds" worth US$2 billion to Alat.
A convertible bond is like a regular bond - the company borrows money from investors and agrees to pay interest over time. At some point, the investor has the option to "convert" the bond into company shares (stock), instead of getting their loan money back.
Investors like them because If the company's stock price goes up, they can convert the bond into shares and potentially make more money. If the stock price doesn’t do well, they can just get their money back with interest. The company that borrows doesn’t have to pay all the loan back in cash if investors choose to convert it into stock. So it's sort of a win-win for both the lender and the borrower.
In Alat's case, however, Lenovo issued zero-coupon bonds where it doesn't have to pay periodic interest (Alat cannot accept interest payments either). Instead, these bonds can be converted to Lenovo shares after three years.
If Alat decides to convert those bonds into shares, Lenovo will issue new shares to Alat at maturity. According to the deal terms, the conversion price would be HK$10.42 per share, which represents a premium of approximately 10% over the average VWAP (Volume Weighted Average Price) for the last 30 consecutive trading days immediately before the date Lenovo issued the bonds.
But what's the benefit to Lenovo? Why strike such a deal? It's probably for two crucial, strategic reasons:
Firstly, Lenovo would likely use the money from these bonds primarily to pay off its existing debts. This helps reduce the burden of past borrowings, and lowers future interest expenses for Lenovo, steadying the company's balance sheet.
Secondly, this is not merely a financial transaction, but seriously smart money.
As part of the agreement, Lenovo will set up a regional MEA headquarters in Riyadh, which will include a customer center and a research and development center focusing on the MEA Region. Lenovo will also establish a new PC and server manufacturing facility in the KSA, extending the company’s existing global footprint
With such a base in the Kingdom, companies like Lenovo will get unprecedented access to the growing Middle Eastern and North African markets, where the demand for both computing hardware, and IT services is expected to grow at a much faster rate compared to few other parts in the world. Similar partnerships have already been concluded with the global HVAC giant, Carrier Corporations and Softbank.
Expect more companies to follow.
Robotics and AI: Levers of Mass Construction
On the very day of its public unveiling, Alat announced a joint venture with Softbank to set up a manufacturing base for "groundbreaking industrial robots". The timing of the JV announcement underscores its strategic importance.
The Kingdom is looking to accelerate manufacturing to a scale and velocity that's previously unheard of. Advanced industrial robotics and AI trained on both organic and synthetic data are going to provide tremendous leverage. Alat is unabashedly ambitious on this project, already estimating an impact of US$1 billion to the Kingdom's GDP by as early as 2025.
We want this to be the start of a gamechanger for manufacturing around the world. Together with SoftBank Group, we see an immense market opportunity for robotics both in the Kingdom, the Gulf, and globally [...] - Amit Midha (CEO, Alat)
A "Zero-Shot" Moment
Until a few years ago, a commercial investment of this scale in industrial-scale, autonomous robots would have been viewed as less than ideal. However, a series of recent breakthroughs has changed that.
At the centre of these developments is a tectonic shift in the availability of foundational models that provide the so-called "zero-shot capabilities", which means that an AI-powered robot can now perform tasks without being trained on dedicated training data specific to that task. According to a paper published in December of 2023, "... this would enable robots to generalise their learned knowledge to novel cases, enhancing adaptability and flexibility for robots in unstructured settings."
In other words, we are now entering an era where autonomous robots, aided by large foundational models will be able to autonomously perform tasks that require higher-order thinking.
This has been made possible by resolving a singular limitation - the lack of training data. In the days of yore, if you had to train a robot to perform a specific task, it had to learn through trial and error or by viewing copious amounts of video footage.
But now, that has changed. Robots, powered by new foundation models are pre-trained on extensive data from various domains, such as natural language processing, computer vision, and manufacturing processes. This is very similar to how more popular foundation models, such as those powering your favourite conversational AI chats, have been pre-trained.
According to the same paper mentioned above, Integrating robotics with such foundation models could someday produce robots that are aware of the context in which they operate, dramatically increasing the robots' ability to perceive and interact with their environment.
When Alat and KAUST (King Abdullah University of Science and Technology) jointly announced the "ALAT - KAUST AI Training Program", hidden in the press release was a list of specialisations these training programs would focus on. From computer vision to semantics segmentation and object detection, the emphasis is clearly on applying these AI principles to advance the boundaries of industrial robotics.
From Zero-Shot to an Autonomous Manufacturing Workforce
The collaboration between Alat and the SoftBank Group Corp. is a fascinating one. It was also one of the first ones to be formalised. That's not a coincidence, but a strategic masterstroke.
The new JV will build industrial robots based on intellectual property developed by SoftBank Group and its affiliates that will perform tasks with minimal additional programming, that are ideally suited for industrial assembly and applications in manufacturing and production.
Where Alat is considered, there are no Minimum Viable Products and therein lies the genius of starting with what will be a "scale-enabler". This robot manufacturing factory will manufacture industrial robots that will, in turn, work at the numerous manufacturing facilities assembling thousands of products across hundreds of product lines across Alat's business divisions.
Mind you, all this will still be powered by renewable energy as we saw earlier. No wonder the official projection itself estimates a total of 32,000 factories operating in the Kingdom by 2035.
It will be interesting to see how this plays out. There will essentially be two milestones: the first one in 2030, which is where the current Saudi Vision document momentarily pauses and the second by 2035 - allowing for half a decade of gestation for the compounding impact of these individual initiatives to present themselves.
The unprecedented velocity of execution is understandable. After all, Alat has a mandate to transform the Kingdom into a global powerhouse of advanced technological and industrial manufacturing over the next six years. Not many startups have such an audacious mission nor a comparable war chest of hard cash, but Alat certainly stands at the cusp of making this memorable transformation for global manufacturing.
PS: Please DM me for any missed attributions.
Learner | UX/UI Designer & Developer | Transforming Businesses with Inspiring UX/UI
2 个月Very informative. The whole world now understands the need for a sustainable economy. That is why the Circular Economy is a key to decarbonising and businesses are adapting it even if they have to compromise with short gains. We must think out of the box design things human centric, even if required to redesign.
GM, Head of Products, Dynamics 365 AI ERP at Microsoft
2 个月Very well researched and well written Ravi