The Weekly Circuit
👋 Hello from the Middle East!
GITEX, the world’s biggest tech conference, is underway this week in the UAE with tens of thousands of investors, corporate executives and software wonks from around the planet bumping up against each other as they navigate around the packed Dubai World Trade Center.
“It’s a once in a lifetime opportunity to build a digital economy from scratch,” Badrennine Noune, an engineer with Emirati artificial intelligence firm Jais, told The Circuit’s Kelsey Warner amid the fray.
In Abu Dhabi, a cluster of self-driving vehicle developers from China, South Korea and the U.S., will work alongside each other at a new campus in the UAE capital. The emirate’s government signed 25 agreements for the Smart and Autonomous Vehicle Industry group that will be located in Masdar City, specializing in autonomous taxis, underwater drones, robotic installations and artificial intelligence, The National reports.
Among the joiners are China’s WeRide, which is already operating trials for driverless cars on Abu Dhabi roads; Marakeb Technologies, a UAE-based maker of underwater unmanned systems and Joby Aviation, a California-based company developing electric vertical take-off and landing (eVTOL) aircraft.
Coming up next week in Saudi Arabia is the seventh annual Future Investment Initiative conference – known as “Davos in the Desert” – with a list of speakers that includes many of the world’s wealthiest investors and corporate titans. Leading the roster for the three-day talkfest at the palatial Ritz-Carlton Hotel are investment bankers Jamie Dimon of JP Morgan Chase, David Solomon of Goldman Sachs (who is reportedly taking time off from DJing) and Stephen Schwarzman of Blackstone
Others on stage will include Jane Fraser, CEO of Citi; Lawrence Fink, chairman and CEO of BlackRock; Ray Dalio, founder of Bridgewater Associates and David Rubenstein, co-founder of the Carlyle Group. The Riyadh confab, which kicks off Oct. 24, is produced by the Public Investment Fund, the Saudi sovereign wealth fund that has about $700 billion of assets under management.
Leading the proceedings for over 5,000 participants who are paying $15,000 apiece will be Yasir Al-Rumayyan, the PIF’s chairman. Al-Rumayyan’s public profile outside the region took off this year when he led the PIF’s controversial bid to merge its LIV Golf tournament with America’s beloved PGA Tour. Whether the deal can overcome growing U.S. congressional opposition will make up a good part of the chatter next week in the marble halls of the Ritz-Carlton.
Welcome to The Weekly Circuit. Read on for the stories, deals and players driving the news across the MENA business landscape. Please send comments and story tips to [email protected].
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Public Investment Fund: Testing the waters of investor appetite amid geopolitical risk, Saudi Arabia’s PIF is making plans to issue dollar-denominated Sukuk, which are Shariah-compliant bonds. The bond issue by the kingdom’s $778 billion sovereign wealth fund would be the first since Israel and Hamas went to war in the Gaza Strip, sparking warnings from JP Morgan and Morgan Stanley about the conflict’s potential impact on business across the Middle East and North Africa region.
The PIF also unveiled its first major real estate development plans for the Aseer region in the southwest of the country on the border with Yemen. As with the mega-project NEOM, the newly launched Ardara project is actively seeking international investors and commercial partners to build from scratch hotels, restaurants, shops and infrastructure for culture and entertainment.
The Savola Group is mulling whether to sell part of its $5.4 billion stake in Almarai, the Middle East’s largest dairy company, Bloomberg reports. The PIF has a 16% interest in Almarai.
Abu Dhabi Investment Office: ADIO has lured Archer Aviation to set up a Middle East headquarters and manufacturing facility in Abu Dhabi, its first outpost outside the U.S. The company agreed to start an all-electric air taxi service in the UAE as soon as it gets approval to fly from the U.S. regulator. Mubadala Capital, an asset management subsidiary of sovereign wealth fund Mubadala Investment, backed Archer in a $600 million fundraising round that included United Airlines and investment banker Ken Moelis in 2021.
Mubadala: Financial results for Abu Dhabi’s second-largest sovereign wealth fund for the first half of 2023 are forthcoming after a board meeting chaired by Sheikh Mansour bin Zayed Al Nahyan, vice president and deputy prime minister of the UAE.
Emirates Investment Authority: Dubai’s Emirates Integrated Telecommunications, known as du, is working to build generative AI into its customer services, The National reports. The company is owned 50.1% by EIA.
Saudi Arabia is a growing alternative for Mideast startups seeking a new home
When Aly Magdy, founder of an Egyptian startup that makes electric water-scooters, needed to grow his business, he found it challenging in an economy that has been suffering from currency devaluation, dollar shortages, and inflation. So he looked to Saudi Arabia, May El Habachi reports for The Circuit.
Growing economy: The Saudi market expanded 8.7% last year, the most of any G20 country. With small businesses expected to account for a little over a third of GDP by 2030 as part of Saudi Arabia’s economic diversification strategy, dubbed Vision 2030, entrepreneurs from the region are being lured by economic incentives and access to a relatively young market with money to spend.
Attracting startups: “The Saudi market is booming,” Magdy told The Circuit. “They are supporting so many industries, including manufacturing and technology, which is attracting not only startups, but also SMEs [small and medium-sized enterprises] from across the region and elsewhere to come to the country.”
Noticing a trend: Magdy will keep Seavo’s back-office operations in Cairo, but he isn’t the only entrepreneur relocating –and looking for growth – in Saudi Arabia. AstroLabs, a Dubai-based ecosystem builder, says it has supported about 450 businesses in setting up shop in the kingdom since 2018. Lately, the organization has noted a trend of more startups coming from Egypt, Jordan, Pakistan, and even the United Arab Emirates.
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Abu Dhabi sets date for driverless race on Formula 1 Track seeking new competitions
Abu Dhabi has set a date for driverless racing on its Formula One track, aimed at bringing a new spectator sport to the capital while advancing autonomous and robotics systems. The first race for the Abu Dhabi Autonomous Racing League is scheduled for April 28, 2024, with 10 competitors from universities and research teams around the world vying for a prize pool up to $2.25 million.
Coding gurus: Also known as self-driving racing, the sport involves competition among vehicles that are controlled by a computer. “By bringing together scientists, developers, and coding gurus from around the world within an extreme sports arena, we are actively stress-testing capabilities on the racetracks, for safety on our roads,” Faisal Al Bannai, secretary general of the Advanced Technology Research Council, which is overseeing the league, according to a statement.
Car cluster: The news came within a day of the Abu Dhabi government announcing a new research and policy development platform to spur the UAE’s autonomous vehicle industry. The business cluster, headquartered in Masdar City, will provide global players with access to testing facilities. The Abu Dhabi Investment Office, the local business development arm of the capital’s government, expects the new campus to create up to 50,000 jobs and contribute at least $24.5 billion to the UAE economy.
🤖 Dr. Robot: M42, the Abu Dhabi-based healthcare unit created last year, has launched a new initiative that uses artificial intelligence to assist in medical decision-making.
💰 VC Rebound: Venture capital investing in the MENA region notched a “mild” recovery in the third quarter, though compared to the previous quarter it was a surge: up 87% compared to the second quarter, according to data from VC data platform Magnitt.
🚆 Tunnel Vision: Morocco is studying the possibility of resurrecting a railway project that would link Casablanca to Madrid through a tunnel crossing the Strait of Gibraltar.
📡 Tapping Musk: Israel is in talks with Elon Musk’s SpaceX about backing up its wartime communications with satellite-based Starlink, Bloomberg reports.
🚢 Canal Crossing: Egypt is planning to increase transit fees for ships using the Suez Canal by up to 15%, starting in mid-January.
⛟ Diversified Interests: Abu Dhabi holding company Multiply Group, with investments in Rihanna’s lingerie brand and Getty Images, is in talks to buy a stake in Turkish waste management firm Biotrend, Bloomberg reports.
💰 Accounted for: Following the introduction of corporate tax to the UAE, Virtuzone is investing $13.6 million in free tax services to small and medium sized businesses.
✈️ Flight Plan: Saudi Arabia will build a new international airport outside the city of Abha, which is in the southwestern region near the Red Sea and Yemen border.
🪖 Refugee Host: Egypt could be offered relief from its crippling debt to host hundreds of thousands of Palestinians displaced by the Gaza war, The Economist reports.
☀️ Heating Up: Global warming will raise temperatures in Saudi Arabia more than in most countries and pose new challenges for agriculture and society, a new report says.
📈 Omani Offering: Oman’s government-owned OQ Gas Networks raised about $750 million in the Gulf state’s largest IPO ever.The government also plans to invest $30 billion on hydrogen-based energy technologies, aiming to reach its net zero goal for carbon emissions by 2050.
🐼 Panda Debt: Egypt issued $500 million worth of “sustainable” Panda bonds, which are issued in China’s currency and earmarked for financing environmental projects. Meanwhile, the government in Cairo is seeking an increase of more than $2 billion in the $3 billion rescue package it secured from the IMF, Bloomberg reports.
🛬 Crowded Skies: Abu Dhabi International Airport will open its new Terminal A building on Nov. 1 and double the airport’s capacity to 45 million passengers a year.
🚰 Water Ways: Saudi Arabia’s water treatment firm Miahona, a unit of the $50 billion Vision Invest holding company, is considering an IPO next year, Bloomberg reports.
💵 Rating Israel: Fitch warned about the possible impact of war on Israel’s economy, placing the country’s A+-rated currency on its Rating Watch Negative list.
🚢 Dead End: The Russian government canceled plans to build an industrial zone near the Suez Canal that was projected to attract $7 billion in investment.
🏭Iraqi Power: Iraq is launching a series of energy contracts signed with UAE-based Crescent Petroleum to develop three oil and gas fields across the country.
🥋 Martial Arts: The U.S.-based Professional Fighters League, which got $100 million in August from Saudi Arabia’s Public Investment Fund, is in talks to acquire its mixed martial arts competitor Bellator, the Financial Times reports.
On the Circuit
Yasmeen Al Sharaf, director of innovation at the Central Bank of Bahrain, told Arabian Business over a third of management positions in the financial sector, which has surpassed oil and gas in economic contribution in the country, are held by Bahraini women.
Sheikh Saud bin Saqr Al Qasimi, the ruler of the northern UAE emirate Ras Al Khaimah, led the UAE delegation to Beijing to mark the 10th anniversary of China’s Belt and Road initiative. Russian president Vladimir Putin is also in attendance and Hungarian prime minister Viktor Orban is the only leader from the EU.
Ray Dalio, billionaire American investor, has bought a penthouse on Abu Dhabi’s Saadiyat Island after opening an office for his hedge fund Bridgewater Associates in the capital’s financial district, Bloomberg reports.
Paddy Cosgrave, the Irish founder of the popular Web Summit scheduled for next month in Portugal, apologized for posting a critical comment about the Gaza war that prompted several prominent tech figures in Israel to pull out of the conference.
Martina Strong, U.S. ambassador to the UAE, met with over 300 business leaders at a reception in Dubai Monday evening that was hosted by the U.S.-U.A.E. Business Council on the sidelines of the GITEX conference.
Naguib Sawiris, the Egyptian telecoms billionaire, is considering an investment in Barrick Gold Corp.’s $7 billion copper-gold project in the Balochistan region that borders Afghanistan and Iran, Bloomberg reports.
Khalid Al Rumaihi was named chairman of Aluminum Bahrain, the largest aluminum smelter outside China and a unit of Bahrain sovereign wealth fund Mumtakalat.
Giselle Khoury, one of Lebanon’s most prominent female journalists and a veteran of the BBC Arabic, Sky News Arabia and Al Arabiya, died in Beirut at 62.
⛰️ Gulf Getaway: Saudi mega-project Neom has unveiled another location to its growing list of futuristic destinations, this one with an outdoor adventure bent. Leyja will be situated on the mountainous coast of the Gulf of Aqaba, with plans for three boutique hotels, fine dining and facilities for climbing, mountain biking, wadi hiking and wellness retreats.
🎤 Impress Me Much: The concert lineup for the 2023 Abu Dhabi Formula One Grand Prix is starting to take shape with Shania Twain announcing she will perform. The Canadian country-pop star will play on the penultimate night of the concert series at Etihad Park on November 25, joining other already-announced artists including Dutch DJ Tiesto and US singer Ava Max on November 23 and the marquee race-day concert by the Foo Fighters on November 26. The artist performing on November 24 is expected to be revealed soon.
🕌 Peace Vision: Shuttling around the Middle East to consult with allies about the Israel-Hamas war, U.S. Secretary of State Antony Blinken visited the Abrahamic Family House in Abu Dhabi, a prayer compound built by the UAE with a mosque, a church and a synagogue. “This is what the future of the region should look like,” he said.
⚽ No Goal: Qatar’s Sheikh Jassim bin Hamad has withdrawn his $5 billion bid to buy the Manchester United soccer club, the BBC reports. British billionaire Jim Ratcliffe, who also offered $5 billion to the Glazer family, which sought $6 billion, may now try to buy a 25% stake for $1.5 billion, according to the BBC.
🥋 Jiu-Jitsu Politics: The Abu Dhabi Extreme Championships, or ADXC, a cage-based martial arts competition based on Brazilian jiu-jitsu, is the latest example of the UAE’s political strategy for building international influence through sports.
Ahead on the Circuit
Oct. 16-20, Dubai, UAE: GITEX. The biggest consumer technology and startup show in the world. Dubai World Trade Center.
Oct. 16-20, Dubai, UAE: AI Everything. Hosted by the UAE’s minister of state for artificial intelligence and held on the sidelines of GITEX. Dubai World Trade Center.
Oct. 16-20, Abu Dhabi, UAE: World Investment Forum. A gathering of global leaders brought together by the United Nations Conference on Trade and Development to tackle issues related to sustainable development. ADNEC Abu Dhabi.
Oct. 24-26, Riyadh, Saudi Arabia: Future Investment Initiative. An annual gathering of executives, investors and government officials exploring the future of investment. The Ritz Carlton.
Oct. 29-31, Riyadh, Saudi Arabia: Global Health Saudi. A gathering of Saudi and international players in health care and medical devices. Riyadh Front Exhibition & Conference Center.
Oct. 30-31, Dubai, UAE: AIM Summit. A meeting of leaders from the alternative investment industry including hedge funds and private equity to discuss market trends and opportunities. Jumeirah Emirates Towers.
Oct. 31-Nov. 1, Abu Dhabi, UAE: Abu Dhabi Smart City Summit. Bringing together key government and private organizations to collaborate and discuss initiatives and technology requirements to make Abu Dhabi a leading global smart city. Conrad Hotel.