👋 Hello from the Middle East!

Today in The Daily Circuit, we’re looking at Saudi Aramco’s sales growth in China, a map of the UAE’s $2.5 trillion in foreign assets, Mubadala’s investment in OpenAI rival Anthropic and Adam Neumann’s bid to retake ownership of WeWork. But first, a Saudi jump-start for Lucid’s luxury EVs.

Less than a month after Lucid’s CEO said the electric car start-up must not rely on the “bottomless wealth” of Saudi Arabia, its biggest backer, the company is raising capital from an affiliate of the kingdom’s Public Investment Fund (PIF). Shares in Lucid jumped 8% on the news that Ayar Third Investment Co. will buy $1 billion worth of stock amid lower-than-expected demand for luxury EVs. 

The PIF, which has a 60% stake in Lucid, opened a factory in the kingdom last year and has poured billions into the California company as it looks to become a significant regional manufacturer. Saudi Arabia expects 30% of car sales to be EVs by 2030, but faces consumer hurdles since the price of gas in the kingdom is subsidized and less than 1% of current passenger car sales are electric. 

When the new Lucid plant opened last September, outside the western port city of Jeddah, the initial plan called for assembling 5,000 EVs a year with an eventual target of an annual 155,000 vehicles exported from the kingdom. Such output would be a major leap for Lucid, which expects to make 9,000 cars in 2024. By comparison, Elon Musk’s Tesla sent almost 1.4 million cars off its assembly lines in the U.S., Germany and China in 2022. 

ARAMCO IN CHINA

Saudi Aramco, the world’s largest oil company, sees China as vital to its future business growth. Speaking at the China Development Forum 2024 in Beijing on Sunday, Aramco President and CEO Amin H. Nasser cited data showing that demand for oil will continue to be robust in the world’s No. 2 economy. He also pointed to joint interests in renewable energy and materials manufacturing. “We are not mere investors, and China is not just a market to us,” Nasser said. “We want to be a partner of first resort in China’s economic development journey, as new opportunities clearly come into focus.” On Monday, the Saudi Ports Authority announced a new shipping route connecting Damman, the center of the kingdom’s oil industry, to ports in Shanghai, Xiamen, Dachan Bay and Qingdau in China.

GLOBAL SCOPE

A new interview with the UAE’s foreign investment chief puts the country’s current assets abroad, both government and private, at an estimated $2.5 trillion. Jamal Bin Saif Al Jarwan, Secretary-General of the UAE International Investors Council (UAEIIC), also told the Emirates New Agency WAM that the portfolio is doing well despite economic headwinds. The UAE’s international investment footprint is divided between sovereign wealth funds holding 72% of the assets, Al Jarwan noted. Abu Dhabi Investment Authority (ADIA) is the leading foreign investor, along with Mubadala Investment Co., Investment Corporation of Dubai, Emirates Investment Authority and ADQ. All told, the UAE owns seven sovereign wealth funds with assets exceeding two trillion dollars, followed by government-owned and quasi-governmental companies with 18%, UAE banks with 2.5% and 7.5% originating from family-owned and private companies. The “most prominent” deal in 2023 was between U.S. private equity firm Apollo and ADIA to acquire chemicals manufacturer UniVar for $8.1 billion, he said.

Mubadala: ATIC Third International Investment Co., a unit of Mubadala, will buy close to $500 million of shares in Anthropic, a challenger to OpenAI, from the estate of bankrupt crypto exchange FTX. Mubadala said on Tuesday it participated in a fundraising round by Indian student loans firm Avanse through its affiliate Alpha Investment Company. Avendus PE Investment Advisors Private Ltd, via its fund Avendus Future Leaders Fund II, also participated in the funding round, which raised 10 billion Indian rupees ($120 million).

International Holding Co.: International Resources Holding, a unit of Abu Dhabi-based IHC, is interested in acquiring Zambia’s Lubambe Copper Mine, an asset that China’s JCHX Mining has already agreed to buy, Reuters reports.

🏢 Office Space: Adam Neumann has bid to buy back WeWork for more than $500 million, the Wall Street Journal reports. 

💻 Nefarious Links: SpaceX’s Starlink is being widely used in Yemen, including by Houthi rebels, according to an investigation by Bloomberg that looked at the worldwide use of the satellite internet service on the black market.

🧮 Homework Help: The UAE Ministry of Education is partnering with Alef Education, an Abu Dhabi-based EdTech company, to develop an AI tutor for school-aged math. 

💻 Gig Work: The MENA region has one of the fastest-growing freelancer economies with registrations for contract workers surging 142% in 2023 compared to the previous year, according to data from recruiter Outsized.

📞 Call Home: Dubai’s Metro installed phone booths at several stations enabling passengers to make international calls during Ramadan.

Saudi Crown Prince Mohammed bin Salman met in Jeddah with the Chairman of the House Armed Services Committee Mike Rogers, (R-AL), along with committee members Adam Smith (D-WA), Salud Carbajal (D-CA) and Veronica Escobar (D-TX).

UAE President Sheikh Mohamed bin Zayed spoke to Santiago Peña, President of Paraguay, by phone on Monday to discuss bilateral relations with an emphasis on trade, renewable energy and food security.