CFIUS review leads to AI startup losing Saudi backing

Business news | December 4, 2023

By Peter Clarke

Artificial Intelligence MPUs/MCUs

Prosperity7 has sold its stake in Rain Neuromorphics, the AI processor company that is backed by Sam Altman, the founder and CEO of OpenAI.

Prosperity7, a subsidiary of the state-owned oil company Saudi Aramco, was the lead investor in Rain’s Series A funding round that raised US$25 million in February 2022. Prosperity7 has sold all its shares in Rain Neuromorphics following a review by the Committee on Foreign Investment in the United States (CFIUS), according to a Bloomberg report.

CFIUS is a watchdog agency that reviews deals for national security implications and had instructed Prosperity to sell up its stake in Rain at some point in the last 12 months the report said.

Rain Neuromorphics no longer lists Prosperity7 as an investor on its Linkedin Page. “Our seed round was led by Sam Altman (Open AI). In addition, our current VC partners include Y Combinator, Daniel Gross, Jaan Tallinn, Founders X Fund, Airbus Ventures, Liquid 2 Ventures and Deepwater,” the company states.

CFIUS does not comment on investments and deals that have or are being reviewed.

However, the exclusion of Saudi Arabia from investments in US-based AI companies is consistent with the tightening of restrictions on the export of AI technology. Increased requirements for export licenses were introduced by the US government in October that applied to China, Saudi Arabia, Iraq and Vietnam amongst others.