Gulf sovereign wealth funds are increasing exposure to artificial intelligence across equity stakes, infrastructure deals, and research partnerships as part of a broader strategy to diversify national economies and strengthen digital competitiveness.
In early 2025, OpenAI CEO Sam Altman visited Abu Dhabi for funding discussions with MGX, the Emirate’s AI-focused investment vehicle. The talks reflect a broader pattern of capital flow, with regional funds accelerating investment in generative AI, semiconductors, data centres, and infrastructure.
According to the latest Deloitte report, Saudi Arabia, the UAE, and Qatar are using sovereign vehicles to back both foreign and domestic AI ventures. In the past six months, Saudi Arabia’s Public Investment Fund (PIF) has signed agreements with Google to develop a regional AI hub and with Amazon Web Services to deploy $5.3 billion in data centre capacity. The PIF’s affiliates were also involved in a $5 billion, 1.5GW-capacity data centre project at NEOM with DataVolt and in a $75 million deal with Zoom.
In Abu Dhabi, G42—an entity partly owned by Mubadala—secured a $1.5 billion investment from Microsoft and partnered with BlackRock and Microsoft to launch the Global AI Infrastructure Investment Partnership. Through MGX, the group has committed to the $500 billion US Stargate project, which aims to build large-scale AI infrastructure by 2029. Mubadala has also invested in OpenAI and is backing applied AI initiatives in the UAE.
Qatar’s sovereign fund, the Qatar Investment Authority (QIA), has invested in Cresta, Databricks, Elon Musk’s xAI, and the Oman Investment Authority. It also holds stakes in semiconductor and AI firms across the US, France, and Japan.
According to the Deloitte report, these moves align with government strategies. The UAE’s National AI Strategy 2031 targets 40% AI-driven GDP contribution, while Saudi Arabia aims for 12% by 2030. Both states position AI as a pillar of non-oil economic growth alongside tourism, sports, and financial services.
The funds also support domestic capability building. Abu Dhabi’s Mohamed bin Zayed University for Artificial Intelligence (MBZUAI) has produced JAIS, a large language model (LLM) for Arabic and English, through G42’s Inception unit. A Hindi LLM, NANDA, is under development with Cerebras. ADIA has partnered with SC Capital Partners to target data centre deals in Asia-Pacific and launched ADIA Lab for AI research.
Chief technology officers now play a larger role in shaping sovereign fund strategies, from setting RFP parameters to assessing investment KPIs. In-house AI expertise is becoming a priority, with an increasing number of transactions reviewed for technological alignment.
The AI investment thesis is threefold: financial returns from high-growth tech, domestic GDP impact through economic diversification, and early access to technology for local deployment in sectors such as oil, healthcare, and public services.
Risks remain
Rapid innovation cycles, inflated valuations, and geopolitical tensions—particularly around US-China tech competition—could impact investment returns and access. Concerns have already been raised by US lawmakers regarding Abu Dhabi’s ties with both US and Chinese tech firms.
While early-stage failures are expected, the Gulf funds are moving to consolidate strategy and increase selectivity. With multiple large-scale projects now underway, sovereign investors are positioning AI as both a growth driver and a tool for national competitiveness.
