The Daily Circuit
👋 Hello from the Middle East!
Today in The Daily Circuit, we’re looking at IPO fever in Dubai and Riyadh, Saudi Arabia’s accelerating debt sales, hedge fund Millennium Management’s big bet on Egypt’s falling currency and Steve Mnuchin’s affection for TikTok. But first, Sam Altman and Abu Dhabi are back in the headlines together.
This week, Abu Dhabi launched AI investment company MGX with the ambition of building up $100 billion in assets under management within a few years, which would make it one of the biggest AI-focused investors in the world. Now, the brand new firm – with founding partners Mubadala and the UAE’s flagship artificial intelligence company G42 – is in early talks with Sam Altman to invest in his multi-trillion-dollar chip venture, the Financial Times reports.
A quick timeline of Sam Altman in the UAE: In June of last year while on a global speaking tour, he charmed a crowd in Abu Dhabi when he noted that the emirate has been talking about AI “since before it was cool.” Four months later, G42 announced a partnership with Altman’s OpenAI, the creator of ChatGPT, to scale up the availability of generative AI tools in the Middle East in sectors where it already has clients, like financial services, healthcare and energy. Last month, Altman suggested the UAE could lead the formation of a global AI watchdog, speaking to UAE Minister of AI Omar Al Olama via video link during the World Governments Summit in Dubai.
The FT’s report today follows earlier headlines that the OpenAI Co-founder and CEO is seeking trillions of dollars to fund a chip-making business with the aim of reducing dependence on other manufacturers like Nvidia. That would provide the vast computing power necessary to bring OpenAI’s biggest ambitions for generative AI to bear.
Al Olama told the FT that he also sees Elon Musk, who founded xAI last year, bringing some of his own business to the UAE. “I don’t think it’s far out for him (Musk) to do something here,” Al Olama said, adding that “the economics are going to dictate what he and others do here.”
📰 Developing Stories
GUARANTEEING BAHRAIN
The U.S. Export-Import Bank (EXIM) voted on Thursday to approve a $500 million loan guarantee for an oil and gas drilling project in Bahrain, rejecting appeals to turn it down because it expands the use of fossil fuels. The Bapco Energies project covers a field in the kingdom that has over 400 new oil wells and 30 gas wells. In a letter to the EXIM board this week, Democrats in Congress pushed for rejection of the loan guarantee, though the bank said the project includes measures to reduce greenhouse gas emissions. “This transaction will support thousands of U.S. jobs and play a crucial role in ensuring Bapco Energies is able to achieve its climate goals of enhanced grid interconnectivity, more efficiency, decarbonization, and investments in large-scale solar projects,” EXIM President Reta Jo Lewis said in a statement.
IPO FEVER
Dubai companies raked in $9.4 billion in IPOs during the past three years amid an economic boom reflected in the Dubai Financial Market General Index’s crossing 4,000 for the first time in eight years, according to the Dubai Securities and Exchange Higher Committee. Meanwhile in Riyadh, a massive jump in trading volume has been a boon to the Tadawul Exchange. The average daily value traded on the exchange has climbed to 8.9 billion riyals ($2.4 billion), up 68% from 5.3 billion riyals in all of 2023, according to data compiled by Bloomberg. That’s a “major positive,” said Citigroup Inc. analyst Rahul Bajaj.
💲 Sovereign Circuit
Public Investment Fund: Saudi Arabia’s sovereign wealth fund is considering plans to accelerate debt sales or obtain bank loans to help pay for the kingdom’s trillion-dollar economic transformation project, Bloomberg reports. The PIF is profiled in The Economist, which says it has the impossible task of earning “eye-watering returns while speeding the shift to a post-oil economy.”
Abu Dhabi Investment Authority: ADIA is reportedly in talks to invest in India’s Pocket FM in a new round of funding. The audio storytelling startup, which is backed by Tencent, Tanglin and Times Internet, has recently raised about $100 million from Lightspeed Venture Partners amid rapid growth in the U.S., according to TechCrunch.
🗣 Circuit Chatter
😊 Bright Horizon: Moody’s revised its outlook for UAE banks to “positive” from “stable” based on the country’s economic rebound from the pandemic and its industrial diversification efforts.
🗞️ Newspaper Volley: UAE-backed RedBird IMI is leaning toward selling the Telegraph after U.K. Prime Minister Rishi Sunak’s government said it is working to ban foreign state ownership of news organizations, the Financial Times reports.
🇪🇬 Smart Bet: Millennium Management, one of the world’s biggest hedge funds, made tens of millions of dollars when Egypt allowed its currency to weaken after a successful bet by one of its senior traders, Bloomberg reports.
🛢️ Oil Disruption: The International Energy Agency raised its assessment of 2024 oil demand growth for a fourth time since November as Houthi attacks disrupt Red Sea shipping.
🚙 Drive Ahead: Zeekr, Chinese automaker Geely’s premium electric vehicle brand, has partnered with Dubai-based AW Rostamani Group to introduce its cars to the UAE market.
🛫 In the Air: Delta Airlines said that following an extensive security risk assessment, it plans to resume daily flights between New York and Tel Aviv starting June 7.
↪↩ Closing Circuit
💰 Gulf Connection: Saudi Venture Capital, a government-owned VC firm, has invested $30 million in a private equity fund managed by Abu Dhabi-based Olive Rock Partners.
🛍️ Retail Rally: Dubai-based Majid Al Futtaim, the Middle East’s largest mall operator, reported a 12% surge in net profit last year on strong property and entertainment business performance and despite global economic uncertainties.
☁️ Cyber Sale: Zscaler, a San Jose, Calif.-based cloud security company acquired Israeli cybersecurity startup Avalor for $350 million.
🇵🇰 Expat Investors: Paklaunch, an investment platform catering to Pakistani expats, closed a seed-funding round without disclosing the amount raised and said it plans to fund startups in Pakistan and GCC countries.
🌍 Power Circuit
Sheikh Mohammed bin Rashid, Ruler of Dubai and Vice President of the UAE, received well-wishers on the occasion of the Holy Month of Ramadan in the host council at Union House in Dubai. He was accompanied by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai and Chairman of the Executive Council of the Emirate of Dubai, and Sheikh Ahmed bin Mohammed, Second Deputy Ruler of Dubai and Chairman of the Dubai Media Council.
Saudi Crown Prince Mohammed bin Salman will make an official visit to Bangladesh later this year at the invitation of Prime Minister Sheikh Hasina, according to an announcement by Saudi Ambassador to Bangladesh Essa Yussef Essa Al Duhailan.
Mohammad Mustafa, Chairman of the Palestine Investment Fund and a former World Bank economist, was appointed Prime Minister of the Palestinian Authority by President Mahmoud Abbas on Thursday, replacing Mohammed Shtayyeh.
➿ On the Circuit
Steve Mnuchin, Former U.S. Treasury Secretary and head of Liberty Strategic Capital which counts the PIF among its backers, told CNBC’s “Squawk Box” on Thursday that he is building an investor group to acquire ByteDance’s TikTok, as a bipartisan piece of legislation winding through Congress threatens the popular app’s continued existence stateside.
Munaf Ali, CEO of UAE-based Phoenix Group, said in an interview with Arabian Business that the UAE is leading the resurgence in cryptocurrency trading because of its “balanced” regulatory approach and business-friendly environment.
Omran Al Khoori, newly elected Chairman of Abu Dhabi-based Response Plus Medical – the largest pre-hospital medical service provider in the UAE and Saudi Arabia – said the company will expand outside the Gulf and become a “global player,” starting with the U.K. and Nordic region.
🎶 Culture Circuit
🩴 Greek Odyssey: A plush resort hotel inspired by the Greek island of Santorini has opened in Abu Dhabi, offering low-lying whitewashed buildings reminiscent of the Aegean hotspot on a private beach halfway between the UAE capital and Dubai. The latest addition to the emirate’s luxury tourism offerings has 22 rooms and is a 35-minute drive from Zayed International Airport.
📅 Circuit Calendar
Apr. 16-17, Abu Dhabi, UAE. Green Hydrogen Summit 2024. Bringing together experts, policymakers, and industry leaders to explore opportunities and the industry’s future. Abu Dhabi National Exhibition Center.
Apr. 16-18, Abu Dhabi, UAE: World Future Energy Summit 2024. A platform to showcase the solutions to some of the most critical challenges identified at COP28. Abu Dhabi National Exhibition Center.
Apr. 16-18, Dubai, UAE. Middle East Energy. Energy leaders gather to debate and shape the future. Dubai World Trade Center.
Apr. 23-25, Dubai, UAE: GISEC Global. A forum for furthering the key discussions that are helping to define cyber resilience and connecting the global cybersecurity community. Dubai World Trade Center.
Apr. 29-May 1, Riyadh, Saudi Arabia: Future Hospitality Summit. An international gathering hosted in cities around the world bringing together the most influential hospitality investors and developers. Mandarin Oriental Al Faisaliah.
Apr. 29 – May 5, Abu Dhabi, UAE: Abu Dhabi International Book Fair. A key event for the publishing industry in the Middle East and North Africa. Abu Dhabi National Exhibition Center.
Apr. 30-May 1, Abu Dhabi, UAE: Mobility Live. A conference and exhibition sponsored by the Abu Dhabi transport regulators, gathering disruptive technology developers in transportation and the public sector. Abu Dhabi National Exhibition Center.
Apr. 30-May 1, Abu Dhabi, UAE: Middle East Rail. The leading conference in the region for rail innovation, technology and strategy. Abu Dhabi National Exhibition Center.