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Comment by thecleaner | Hacker News Reader

A large part of this vision fund is basically Saudi oil money. These folks realize that oil doesn't have that much future if you think in terms of hundreds of years, so they are looking to diversify. Vision fund is not a tool to be on the cutting edge, its just a means to not be left behind. Hence they let VC market decide which horse is worth backing and then they swing their dollars around to see what happens.

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That’s another thing I never got about Saudi’s investments. To me the obvious strategy with all the money would have been to not invest in empty skyscrapers or foreign investments, but pick two or three areas in which you massively bolster research and investment in an area like solar energy. Investment would be local and you try to attract all to talent in the field for both fundamental research as well as to fund companies. Investing in the Vision Fund might safe the cash, but does little for the economic future of UAE.

The Saudis have also done that with KAUST; from what I heard they have turned off all their weird laws in this region of SA (like a SEZ), and were hiring aggressively a few years ago (from the US). I occasionally stumble on some interesting projects from this University, but I for one would be very weary of moving to a desert region where women were disallowed from driving until a few years back, and need to be draped from head to toe in black.

To be fair, there is something more in the picture. UAE for instance is much more cosmopolitan, but has failed to be a research hub, in contrast to rich city states like Singapore. Iran, their neighbour, produces some very smart people however - who then inevitably move out, considering the flavour regime in that country.

Hate to be that guy but I see it so often on HN that I think it’s worth correcting.

You’re wary of moving to a desert special economic zone if you are unsure or suspicious of it

You’re weary of it if you have moved to many such zones already and you are a bit sick of it

Minor nitpick, but UAE (United Arab Emirates) is not the same as Saudi Arabia. It is a neighbouring country.

Not really a minor nitpick.

Thats because the Saudi wealth fund, is not for Saudi Arabia but House Saud.

Norway did the same thing, it has worked very well for their economy so far.

Norway's sovereign wealth fund is vastly larger than the Saudi Arabian one, SA don't have much room to maneuver if the Aramco ipo doesn't work and these investments fail

> vastly larger than the Saudi Arabian one

By one order of magnitude these days, the Norwegian fund's market value was less than $100b in 2004 though.

Saudis do not want smart people being middle class in their country. That would ruin their theocratic state.

When you have so much money to play with, there is just no one basket to put even most of your eggs in. Yes, they have put many into Vision Fund, but many other arenas (especially political ones) demand funding and will not go unfed by mama bird and her oil money.

Saudi Arabia has a problem in that its far larger than UAE and it is also the home of Islam. Loosening cultural restrictions might fly in Dubai, but I'm not sure the Muslim world would be as okay with the same happening in the country that hosts their most sacred site.

Why not? Most of the Muslim world is far less restrictive than Saudi Arabia. And even if they don't like some future loosened restriction there's nothing they can do about it.

I guess it’s just a different vision then. Theirs is the vision of a Saudi ruling family with enough capital to survive the collapse of demand for oil over time.

And by following VCs they gave VC backed start-ups a nice alternative to cash out in case IPOs don't look promising enough. I could imagine some VCs are considering that already.

This should be an obvious warning sign.

Someone whose core business is losing money is trying to recoup them in an area that they have no clue about.

This is a typical guy who feels pressure so he buys at the top and puts his money based on recommendation of others in a business that is going to be next big thing. A typical sucker in other words who will end up penniless.

Poor Saudis.

Poor Saudis.

They should invest in nanotechnology, and make the world’s smallest violin.

>> Someone whose core business is losing money

What, oil? Go look up the average barrel cost for Saudi oil (hint: it's less than 2 lattes). Demand needs to drop to essentially zero before renewables are competitive with their oil. They are not losing money.

> This is a typical guy who feels pressure so he buys at the top and puts his money based on recommendation of others in a business that is going to be next big thing

Well that is how the current VC market works - sadly

Hundreds of years? There’s a reasonable probability _human civilization_ doesn’t have hundreds of years on this planet.

There is always a non zero probability of mankind extinction but within hundreds of years it should be fairly, fairly low

Human civilization can die much easier than mankind. Civilizations have collapsed multiple times before. Back then the effects were localized because civilizations were localized. In today's globalized world the effects could be much more serious.

> Civilizations have collapsed multiple times before

Yeah but it's not like the variables at work before are the same at work today. With the current set of variables, even LESS likely than ever than what you call the "current civilization" would collapse completely, because it's massively decentralized in terms of knowledge.

That is of course true, but I think that the number of variables is so huge that nobody really knows why civilizations collapse. For example, while as you say knowledge is more distributed today, a lot fewer people know how to life self-sufficiently and knowledge is a lot more specialized that it used to be the cause. Proverbially nobody knows how to make a pencil from scratch.

I've noticed that assumption is heavily baked in everywhere you look. I'll bet after the hundreds of thousands of years we have made it so far, humanity, in one form or another, will continue to persist.

I didn’t say “humanity.” I said “human civilization.” I do think there’s hope for humanity, but I’m a lot more bearish about civilization.

If human civilization collapses and humans go back to hunter-gatherer subsistence, it means death to about 95-97% of humans.

Not precisely an extinction, but still not a lot of hope.

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