The Weekly Circuit
👋 Good Monday morning in the Middle East!
What started as a story for the sports pages about pro golfing escalated over the past week into an epic tale of business, politics and the evolution of the modern Middle East. The deal that aims to merge the new Saudi Arabia-backed LIV Golf circuit with the established PGA Tour and settle a storm of litigation features some of the world’s top golfers, corporate executives and government leaders, including Saudi Crown Prince Mohammed bin Salman and former U.S. President Donald Trump. Here’s how it’s playing out:
After a year of confrontation, bidding wars and lawsuits, the PGA stunned the golfing world by announcing an agreement last Wednesday to merge with its deep-pocketed rival, LIV Golf, and create an international tour that includes all the top players. The deal reshapes the PGA, which was being outbid for championship golfers such as Phil Mickelson and Brooks Koepka, who were lured with bonuses reaching a reported $200 million. It offers legitimacy to the LIV, which was shut out of sponsorships and television contracts.
Driving the deal was Yasir al-Rumayyan, the 53-year-old governor of Saudi Arabia’s $700 billion Public Investment Fund and chairman of Saudi Aramco, who is a well-known golf aficionado. Under the agreement, al-Rumayyan will be chairman of the new entity that owns the assets of the PGA, LIV Golf and Europe’s DP World Tour.
Jay Monahan, the PGA commissioner, was the other key protagonist. For the past year he has publicly fumed about LIV Golf’s poaching of PGA talent, directing the $50 million legal battle against the upstart tournament. Last week, it was revealed that he’s been negotiating for weeks with al-Rumayyan. Monahan’s explanation: “We cannot compete with a foreign government with unlimited money.”
LIV Golf was able to count on Trump’s support throughout its battle with the PGA. The former president, who forged an alliance with the Saudi crown prince while in the White House, hosted the new league’s tournaments on his golf courses after being snubbed by the PGA. Trump sent congratulations on his Truth Social network after the agreement was announced, calling it “A BIG, BEAUTIFUL, AND GLAMOROUS DEAL.”
Beyond the green fairways, the PGA-LIV deal may have implications for Saudi Arabia’s business interests and MBS’ political muscle, both within the region and in his relationship with President Joe Biden. While the Public Investment Fund has pumped billions into the desert kingdom’s city-of-the-future Neom project, developing luxury tourism sites across the country and creating a moviemaking and entertainment industry practically from scratch, it counted one significant loss last week: Argentine soccer star Lionel Messi turned down as much as $1.6 billion for a three-year contract to play with Saudi Arabia’s Al-Hilal team, choosing U.S. Major League Soccer’s Inter Miami instead.
Welcome to The Weekly Circuit, where we cover the Middle East through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please send comments and story tips to [email protected].
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Sam Altman delves into AI’s future in Mideast tour from Tel Aviv to Abu Dhabi
In a two-day dash through the Middle East, OpenAI CEO Sam Altman invited audiences in the United Arab Emirates, Qatar, Jordan and Israel to explore the benefits of artificial intelligence and help guard against the “existential risk” it presents, Shoshanna Solomon reports for The Circuit. “I am hopeful that the region can play a central role in this global conversation,” Altman said last week in the UAE’s capital of Abu Dhabi.
Enthusiasm and disruption: At all his Mideast stops, Altman radiated enthusiasm for both OpenAI’s groundbreaking ChatGPT product and the technology’s expanding abilities in language, business tasks, science and software development. As he did testifying in Congress last month and meeting with European leaders last week, Altman cautioned about the disruptions AI is expected to cause, such as broad job losses in fields where humans can be replaced by machines.
Managing risks: “We face serious risk. We face existential risk,” Altman said during a Q&A session on Tuesday at Hub 71, an Abu Dhabi business park teeming with software startups. “The challenge that the world has is how we’re going to manage those risks and make sure we still get to enjoy those tremendous benefits. No one wants to destroy the world.”
Brisk pace: After touring Europe the previous week, Altman, 38, skipped through the Middle East at a pace of two countries a day. He spoke to Israeli audiences on Monday morning in Tel Aviv and then to Jordanians in Amman in the late afternoon. On Tuesday, he appeared for a morning seminar in Doha, Qatar, and took a short flight to the UAE for the afternoon session. He finished the week with appearances in India and South Korea.
Before it was cool: Altman, whose talks were also webcast, praised the UAE’s early embrace of AI, noting the high level of investment in the technology by both government and private interests. “I think there’s been discussion about AI… in Abu Dhabi in particular, before it was cool,” he said. In Israel on Monday, Altman met with Israeli President Isaac Herzog, visited the R&D center of Microsoft Corp. and appeared onstage in a packed auditorium at Tel Aviv University. He told the campus crowd that the excitement generated by AI means now is a great time to create a startup. He said he was impressed with Israel’s “talent density” and the “relentlessness, drive, ambition level of Israeli entrepreneurs.”
ON THE ROAD
Intel preparing to sell off $1.5 billion stake in Israel’s Mobileye
Since Mobileye Global, the Israeli developer of self-driving car technology, sold shares last year in an IPO, its stock price has doubled. Now, Intel Corp. is planning a secondary offering to carve some profit from the pioneering automotive startup it bought six years ago for more than $15 billion, The Circuit’s Jonathan Ferziger reports.
Retaining control: Intel, one of the largest computer chipmakers, will sell 35 million shares in its Jerusalem-based subsidiary, a stake worth about $1.5 billion, with an option to sell another 5.25 million shares, Mobileye said in a June 5 filing with the U.S. Security and Exchange Commission. Goldman Sachs and Morgan Stanley are managing the sale, which will leave Intel solidly in control with more than 88% of the shares.
Autonomous cars: Mobileye is a world leader in creating software, semiconductor chips, cameras and sensory arrays to enable the development of self-driving vehicles. BMW, Volkswagen and Nissan are among its clients. Senior auto executives regularly make the pilgrimage to Jerusalem to meet with Mobileye CEO Amnon Shashua.
Great expectations: The company raised some $860 million in its IPO at the end of October, giving it a market value of about $21 billion after the first day of trading. That was well short of the $50 billion Intel had earlier expected as it was making preparations for the initial offering. Since then the stock price has nearly doubled from $21 a share to $41.77 at the end of last week as its market cap surged to $34 billion. The sale will give Intel cash at a time when it has announced plans to invest more in artificial intelligence, vying with upstart competitors such as Nvidia.
Going up: Mobileye shares are likely to reach $50 a share over the next 12 months, according to Canaccord Genuity, a Toronto-based investment bank, which initiated coverage of the company last week with a “buy” rating. In an analyst note, Canaccord noted Mobileye’s “impressive growth indicators and long-term potential within its category.”
Growth Engine: The World Bank raised its growth forecast for the UAE to 3.4% from 1.1%, based on higher oil output, recent economic reforms and new investments.
LNG Tap: Qatar is competing with the U.S. for customers of liquefied natural gas from emerging Asian nations by offering cheaper and shorter contracts, Bloomberg reports.
Port Support: Abu Dhabi-based AD Ports signed a 25-year deal with Singapore’s Crystal Offshore to provide logistics services at its facilities around the world.
Missile Defense: Germany is moving forward with its $4.3 billion purchase of Israel’s Arrow-3 missile-defense system as tension builds with Russia.
Regional Banker: Dubai-based Mashreqbank applied for banking licenses in Saudi Arabia, Oman and Pakistan as part of its push to grow regionally.
Research Partners: Eli Lilly & Co., the world’s largest pharmaceutical company by market value, signed an agreement with the Abu Dhabi Health Department to collaborate on clinical research and health care technology.
Top Flyers: Qatar Airways plans to eliminate first-class seats in its new long-haul aircraft, focusing on improving amenities in its business-class service.
Tow’n’Go: Dubai’s RTA transportation agency is using QR codes, GPS and other tech to ease the release process for traffic violators whose cars get towed.
In the Hangar: Saudi Arabia’s new carrier, Riyadh Air, offered a first look at its trademark purple and blue design in a video, though it won’t start flying until 2025.
Coral Nursery: Abu Dhabi environmental specialists are rehabilitating coral in nurseries to help restore some of the reefs off the UAE’s coast that have been hurt by pollution.
Charge It: Canada’s Brookfield Asset Management is buying Dubai-based Network International for $2.8 billion to expand its Middle East credit card processing business.
Jet Finance: AviLease, a jet-leasing company owned by Saudi Arabia, is in talks to acquire Standard Chartered Aviation Finance in a $3.7 billion deal.
Green Bonds: Abu Dhabi’s sustainable energy company Masdar will seek to raise as much as $700 million with a green bond sale in the next few weeks, Bloomberg reports. Masdar and Egypt’s Infinity, meanwhile, signed a government land deal to build a 10-gigawatt wind farm in Egypt costing $10 billion, one of the largest in Africa.
Neom Homes: Saudi Arabia’s Neom project finalized a $5.6 billion deal to build temporary housing for 95,000 as part of the first construction stage of the megacity. In other Neom news, General Electric’s Grid Solutions won a contract to supply gas-insulated substations for a green hydrogen plant that will provide energy for the massive urban development. And as part of efforts to create a production hub for media and entertainment industries in the city, Neom officials signed a collaboration agreement with the Saudi Research and Media Group, which owns Arab News and a range of other publications.
Startup Finance: BlackRock, the world’s largest asset manager, bought Kreos Capital, a London-based investor in Israeli and European startups, for an estimated $300 million.
Full Bloom: Dubai-based Floranow, the Middle East’s largest flower delivery service, acquired Bloomax, the top chain of florists in Saudi Arabia.
Postal Fleet: Lumi Rental Co., the leasing unit of Saudi Arabia’s Seera Group, signed an $11.2 million deal with the Saudi postal service for a fleet of 855 vehicles, including vans, sedans and SUVs.
Telecom Stake: The Qatar Investment Authority, a $445 billion sovereign wealth fund, may seek to buy the Egyptian government’s entire 45% stake in Vodafone Egypt.
Opioid Claims: Israel’s Teva Pharmaceutical Industries will pay Nevada $193 million over 20 years to settle opioid claims, the final step in an agreement worth more than $4 billion and covering claims in all U.S. states.
Startup Fund: SVC, a Saudi Arabia-backed venture capital firm, put $7.5 million into a fund managed by New York-based Endeavor Catalyst for startups in the kingdom.
On the Circuit
Mohamed Alabbar, founder of Dubai-based Emaar Properties and builder of the 162-story Burj Khalifa tower, attended a fundraiser for Sheba Medical Center, Israel’s largest hospital, which has developed partnerships with UAE health care organizations.
Hafize Gaye Erkan, was named Turkey’s first female central bank governor by President Recep Tayyip Erdogan. She was previously co-CEO of First Republic Bank.
Stephen Schwartzman, CEO of Blackstone Group, the world’s largest alternative asset manager, visited Qatar last week to meet with central bank governor Bandar bin Mohammed Al Thani, who is also chairman of the Qatar Investment Authority.
Sherwood Dodge left his position as co-global head of private equity at the Abu Dhabi Investment Authority, making Jerome Mourgue d’Algue the sole holder of the post.
Ahead on the Circuit
June 13, Dubai, UAE: IDC Financial Services Congress. Conference focuses on adoption of digital tools by Middle East financial services companies. Ritz-Carlton Hotel, Dubai International Financial CIFC.
June 13-15, Dubai, UAE: China Global General Trade Expo. Importers and wholesalers in the Middle East meet with suppliers of products made in China. Dubai World Trade Centre.
June 14, Riyadh, Saudi Arabia: Digital Health Conference – KSA. Health care technology companies, doctors, hospitals, government officials meet for Middle East industry summit. Radisson Blu Hotel, Riyadh.
June 14-15, Dubai, UAE: Middle East Event Show. Trade conference for businesses engaged in staging events in the Middle East. Madinat Jumeirah, Dubai.
June 17-18, Tel Aviv, Israel: Fintech Junction. Conference brings together Middle East investors, bankers, regulators and financial tech company executives. Hilton Tel Aviv.
June 20-22, Riyadh, Saudi Arabia: The Saudi Food Show. Chefs, restaurateurs, food company executives, and government officials gather for trade show. Riyadh International Convention and Exhibition Center.
July 17-18, Cairo: Seamless North Africa 2023. Regional conference focusing on banks, fintech and payment processing businesses. Egypt International Exhibition Center.
Red Carpet: Actor Tom Cruise will appear in Abu Dhabi for the Middle East premiere of his latest movie, “Mission: Impossible – Dead Reckoning Part One.” The red-carpet event takes place June 26 at the Emirates Palace hotel. Some of the scenes were shot in Abu Dhabi’s Liwa desert and in a terminal at the emirate’s main airport.
Tel Aviv Pride: Draped in rainbow flags, Tel Aviv played host to more than 150,000 marchers in the city’s 25th annual Pride Parade last week. Netta Barzilai, winner of the 2018 Eurovision song contest, was among the pop stars who performed at a concert celebrating Israel’s vibrant LGBTQ community.
Manchester City Wins: Abu Dhabi-owned Manchester City won European soccer’s Champions League title, defeating Inter Milan 1-0 on Saturday in Istanbul.
Manchester United Bid: Sheikh Jassim Bin Hamad Al Thani, chairman of Qatar Islamic Bank and son of a former prime minister, submitted a fifth bid for the Manchester United soccer team, which has a market value of more than $3 billion. He is competing with British billionaire Jim Ratcliffe to buy the Premier League club from the Glazer family in the U.S., which also owns the NFL’s Tampa Bay Buccaneers.