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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 y

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.

codyb 7y ago
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.
pmiller2 7y ago
Hundreds of years? There’s a reasonable probability _human civilization_ doesn’t have hundreds of years on this planet.
- james_s_tayler 7y ago
  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.
  - pmiller2 7y ago
    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.
    - nine_k 7y ago
      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.
- ekianjo 7y ago
  There is always a non zero probability of mankind extinction but within hundreds of years it should be fairly, fairly low
  - adrianN 7y ago
    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.
    - ekianjo 7y ago
      > 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.
      - adrianN 7y ago
        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.
- deleted 7y ago
  [deleted]
ajmurmann 7y ago
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.
- lazyjones 7y ago
  Norway did the same thing, it has worked very well for their economy so far.
  - olivermarks 7y ago
    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
    - lazyjones 7y ago
      > 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.
- smnrchrds 7y ago
  Minor nitpick, but UAE (United Arab Emirates) is not the same as Saudi Arabia. It is a neighbouring country.
  - robin_reala 7y ago
    Not really a minor nitpick.
- notduncansmith 7y ago
  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.
chewz 7y ago
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.
- goatinaboat 7y ago
  Poor Saudis. They should invest in nanotechnology, and make the world’s smallest violin.
- jakoblorz 7y ago
  > 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
- usecontainers 7y ago
  >> 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.
hef19898 7y ago
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.

codyb 7y ago

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.

pmiller2 7y ago

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

james_s_tayler 7y ago
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.
- pmiller2 7y ago
  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.
  - nine_k 7y ago
    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.
ekianjo 7y ago
There is always a non zero probability of mankind extinction but within hundreds of years it should be fairly, fairly low
- adrianN 7y ago
  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.
  - ekianjo 7y ago
    > 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.
    - adrianN 7y ago
      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.
deleted 7y ago
[deleted]

ajmurmann 7y ago

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.

lazyjones 7y ago
Norway did the same thing, it has worked very well for their economy so far.
- olivermarks 7y ago
  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
  - lazyjones 7y ago
    > 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.
smnrchrds 7y ago
Minor nitpick, but UAE (United Arab Emirates) is not the same as Saudi Arabia. It is a neighbouring country.
- robin_reala 7y ago
  Not really a minor nitpick.
notduncansmith 7y ago
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.

chewz 7y ago

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.

goatinaboat 7y ago
Poor Saudis. They should invest in nanotechnology, and make the world’s smallest violin.
jakoblorz 7y ago
> 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
usecontainers 7y ago
>> 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.

hef19898 7y ago

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.