Saudi Arabia’s tech ambitions just took a black eye with sweeping arrests

Just over one week ago, Saudi Arabian royalty paraded titans of Silicon Valley and Wall Street through the Ritz-Carlton in Riyadh as part of a flashy showcase of the nation’s seriousness about global investing.

Now, that same hotel could reportedly house a series of Saudi tech investors who were arrested Saturday in a sweeping series of arrests that raises doubts about the nation’s tech ambitions and is sure to rattle foreign investors eyeing the Saudis as a partner over the next decade.

King Salman, the country’s leader, arrested eleven Saudi princes in an anticorruption probe that most prominently claimed Prince Alwaleed bin Talal, who is one of his nation’s most visible tech investors. Alwaleed, the chairman of the Kingdom Holding Company, is one of the faces of Saudi tech investing: As of last year he owned 35 million shares of Twitter and with his company owned 5.3 percent of the ride-hail startup Lyft, a stake he acquired in part by purchasing existing shares from Andreessen Horowitz and Founders Fund. His stake in the ride-hailing company is now 4.3 percent, according to a person with knowledge of Lyft’s ownership figures.

The arrests come at a sensitive time for Saudi Arabia: The country is desperately trying to diversify its investments away from oil. So the nation is marketing itself as the next major global tech player, pouring in $45 billion from its Public Investment Fund into a $100 billion tech fund organized by SoftBank. And that’s just the beginning: The Saudi war chest will grow next year when the nation’s state oil company, Aramco, goes public — money that could immediately be invested in U.S. tech.

President Donald Trump on Saturday, in fact, encouraged the Saudis to list the public offering — which is expected to be the largest IPO ever — in the United States on the New York Stock Exchange.

This article originally appeared on Recode.net.