The $50 million fund will invest in young businesses ranging geographically from Turkey to the Arabian peninsula to Central Asia. On Tuesday in Riyadh, Saudi Arabia, Intel chairman Craig Barrett announced the creation of the fund.
Building a tech industry is part of a region-wide push to diversify local economies., a UAE member, is funding 23 separate export zones for outsourcing, film production and Internet software development.
Dubai Silicon Oasis, a combination chip-design center, business park and luxury residential complex, has already landed LSI Logic as a tenant. Typically, these export zones allow companies to operate tax-free and offer housing and other subsidies.
Intel has yet to place investments in any companies, but it will likely do so soon, said William Kilmer, a managing director at Intel Capital. Intel is examining companies in, among other countries, Saudi Arabia, the UAE, Egypt and Jordan.
Jordan, one the few Arab nations without extensive oil holdings, has one of the more evolved tech industries, sources have said.
The types of companies in which Intel may invest varies and could include WiMax companies, cell-phone ring tone providers, and enterprise application developers, Kilmer said.
The Middle East is in the midst of IPO fever, with soaring stock market gains.
A few venture capital firms, such as Minah Ventures, have begun to place investments in the region, but it's still somewhat rare. Intel, however, tries to get into a new market early, in part to use the fund to jumpstart new and emerging markets. Obtaining a return on the investment is more of a secondary goal.
"We were in China early. We got to Eastern Europe and Russia early," he said.
The success of Intel's specialty funds varies widely. Some of the companies in China have had IPOs. The company, however, has said that it may have moved into Russia prematurely.