(Bloomberg) — A day after his inauguration as US President, Donald Trump unveiled a $100 billion venture to fund artificial intelligence infrastructure, backed by three of the biggest names in tech – OpenAI, SoftBank Group Corp. and Oracle Corp. Then there was an Abu Dhabi-based firm that few had heard of: MGX.
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The Emirati investment vehicle is overseen by one of the world’s most influential dealmakers — Sheikh Tahnoon bin Zayed Al Nahyan, who’s the United Arab Emirates’ national security advisor, brother to the country’s president, and the man atop a $1.5 trillion empire that spans everything from wealth funds to the region’s foremost AI firm, G42.
Set up in March, with Mubadala Investment Co. and G42 as founding partners and a goal of eventually topping $100 billion in assets, MGX has emerged as a key tool in the country’s push for AI dominance. It plans to contribute about $7 billion to Trump’s plan, known as Stargate, the Information has reported.
Representatives for MGX declined to comment.
The firm has backed OpenAI, while also teaming up with BlackRock Inc. and Microsoft Corp. on a $30 billion plan to build data warehouses and energy infrastructure. It’s poured money into Elon Musk’s xAI, and was among the investors in Databricks Inc., one of the world’s most valuable privately-held tech companies.
It combines the financial heft of the $330 billion Mubadala — itself a significant force in the world of technology investing — with the AI arsenal of G42, a firm that’s drawn funding from Microsoft and signed deals with Nvidia Corp. and OpenAI.
The fund has hired from Mubadala’s ranks, according to posts on LinkedIn, and its CEO, Ahmed Yahia Al Idrissi, was previously head of direct investments at the sovereign wealth fund. MGX recently recruited an executive from Swedish investment firm EQT AB’s sourcing tool, Motherbrain, as Chief AI Architect, and brought on a McKinsey & Co. veteran to source semiconductor deals.
Trillion-Dollar City
Those moves come as Abu Dhabi, which sits atop 6% of global crude reserves, races to diversify its economy away from oil. While investments in sectors like health care and finance have been key planks of that strategy, AI has increasingly been taking center stage.
To be sure, there have been hurdles to the city’s ambitions.
A US lawmaker last year urged the Commerce Department to consider trade restrictions on G42 over its ties to China. The Abu Dhabi firm has denied “connections to the Chinese government and their military industrial complex,” and has worked out a deal with the US government to end cooperation with Beijing.
Still, the Biden administration has proposed limiting exports of advanced chips to countries including the UAE. At the World Economic Forum in Davos this week, G42 Chief Executive Officer Peng Xiao — also a member of MGX’s board — was dismissive of such curbs.
“It’s really, speaking very frankly here, a gift for another country — to China,” he said on Wednesday. “If you do not supply the necessary baseline technology to your friends, guess who they will call? They will call someone else.”
As one of the few cities in the world with over a trillion dollars in sovereign wealth, the emirate holds an edge in a sector that needs deep-pocketed investors, and AI was in focus when UAE President Mohammed bin Zayed Al Nahyan visited the US in September.
He was accompanied by Sheikh Tahnoon, whose posts on social media platform X since hint at the ambition — and reach — of Abu Dhabi.
Since September, he’s met with Nvidia CEO Jensen Huang, Alphabet Inc. President Ruth Porat and Musk. In those conversations, as well as those with heavyweights of global finance like BlackRock CEO Larry Fink, AI appears to have been a dominant theme.
At the Davos panel this week, G42’s Xiao sat alongside Fink as he declared that the globe needs a massive increase in energy capacity to power data centers for AI — including five gigawatts of computing capacity for the UAE alone.
“If the UAE needs five, just imagine all the major centers around the world,” he said. “This is a massive undertaking.”
–With assistance from Kate Clark.
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