Uber Technologies Inc. raised $3.5 billion from the investment arm of Saudi Arabia, part of an arms race over the future of transportation that is attracting the world’s largest technology companies and auto makers.

The investment from Saudi Arabia’s Public Investment Fund extends a fundraising that totals $5 billion, the largest single investment for a venture-backed company. Including the latest contribution, Uber is valued at close to $68 billion, some $20 billion more than General Motors Co., the nation’s largest auto...