The Daily Circuit: Oil surges after attacks in Iran + Boeing 787 probe

👋 Hello from the Middle East!

In the Daily Circuit today, we report on troubled planemaker Boeing back in the spotlight after the Air India disaster, a slowdown in contracts issued for large-scale projects in Saudi Arabia, G42 launching a London office, EDGE Group’s joint venture with Italian aerospace company Leonardo, and the ways in which robots are becoming integrated into daily life in the Gulf. But first, the market reacts to events in the Middle East…

Stocks fell and oil surged as much as 13% in its biggest intraday rise in three years early on Friday, as investors feared a major escalation of tensions in the Middle East after Israel attacked Iran’s nuclear program and Iranian military leaders.

Brent crude surged to $78 a barrel before easing to around $75, rapidly erasing much of this year’s losses caused by trade tensions and increased OPEC+ output. Gold also hit its highest level in weeks, rising 1.2% to $3,423.30 an ounce as investors fled to safety.

Analysts fear that Iran could target shipping in the Strait of Hormuz, which about one-fifth of the world’s oil passes through, potentially disrupting supplies of millions of barrels of oil a day in an extreme scenario. Such a scenario could see prices reach $130 a barrel, JPMorgan Chase & Co. recently warned.

“We are seeing classical risk-off moves,” Matthew Haupt, portfolio manager at Wilson Asset Management, told Bloomberg. “What we are watching now for is the speed and scale of the response from Tehran. That will shape the duration of the current moves. Quite often these moves fade after the initial shocks.”

Meanwhile, Gulf airlines delayed and cancelled flights to Iran, Iraq and Israel on Friday, with some rerouted mid-flight. Israel’s Ben Gurion Airport was closed until further notice, while Iran closed its airspace and Iraq suspended civilian flights. Flights to Lebanon and Jordan were also disrupted.

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G42 invests with OpenAI, Nvidia to build massive data center

G42, the UAE’s flagship artificial intelligence company, took a big step in its bid to establish regional leadership in the booming field.

The Abu Dhabi-backed tech company, whose Chairman is National Security Advisor Sheikh Tahnoon bin Zayed, announced a partnership with OpenAI on Thursday to build an AI data center with a 1-gigawatt capacity that would make it one of the most powerful facilities in the world.

Among other investors in the Abu Dhabi data center called Stargate UAE – OpenAI’s first major project outside the U.S. – are Oracle, SoftBank, Nvidia, and Cisco.

G42 and OpenAI didn’t disclose a cost for the Abu Dhabi project, although similar projects planned in the U.S. run well over $10 billion, The Wall Street Journal reports. It said the data-center project is the fruit of months of negotiations between the UAE and the Trump administration that culminated in a deal last week to allow the U.A.E. to import up to 500,000 advanced AI chips a year.

Abu Dhabi’s Mohamed bin Zayed University of Artificial Intelligence, meanwhile, is planning next week’s graduation ceremony, where 104 students from 24 countries will get their degrees, including the six-year-old school’s first Emirati PhD graduate.

MBZUAI’s President Eric Xing told Bloomberg in an interview published today that he hopes to make his school the Stanford of the Gulf, pointing to the culture of innovation and entrepreneurship it cultivates, and its global influence.

Trump heads home after sewing up $200 billion in UAE deals

President Donald Trump wrapped up his four-day tour of the Gulf with a pomp-filled visit to the UAE, locking in some $200 billion in contracts that starts to fulfill the UAE’s pledge to spend $1.4 trillion in the U.S. over the next decade. He took off for Washington in the early afternoon.

With attention focused on the U.S. leader’s commitment to ease restrictions on selling advanced AI semiconductor chips to the UAE and Saudi Arabia, the two countries signed an agreement to build an AI development campus in Abu Dhabi that would be the world’s largest outside the U.S.

Though specifics on the AI tech purchases were not disclosed, Trump and Sheikh Mohamed met together with Jensen Huang, the CEO of Nvidia, which is the largest maker of the most advanced chips.

“We’re making great progress for the $1.4 trillion that the UAE has announced that it intends to spend in the United States over the next couple of years,” Trump told the UAE-U.S. Business Forum in an address early today. “This will generate billions and billions of dollars in business and accelerate the UAE plans to become a really major player in artificial intelligence.”

Trump also met with Dr. Sultan Al Jaber, the UAE Minister of Industry and Advanced Technology and CEO of ADNOC, at the business summit.

Among the deals were a $14.5 billion commitment from Etihad Airways for the purchase of 28 Boeing aircraft and a $60 billion oil and gas deal with ADNOC involving ExxonMobil, Occidental Petroleum, and EOG Resources. UAE officials said today the country will increase the value of its energy investments in the U.S. to $440 billion over the next 10 years.

Before returning to Washington, Trump visited the Abrahamic Family House on Abu Dhabi’s Saadiyat Island, the monumental prayer compound built by the UAE that contains a mosque, a church and a synagogue.

Gliding into President Sheikh Mohamed Bin Zayed’s Qasr Al Watan palace grounds on Thursday night for a state dinner, Trump’s motorcade was flanked by mounted camels to the right and Arabian stallions to the left, The Circuit’s Omnia Al Desoukie reports from Abu Dhabi.

The Emirati and American leaders then strode together through the palace’s grand marble halls, where Emirati children waved flags while the national anthems of both countries were played. President Trump was presented by Sheikh Mohammed with the Order of Zayed, the country’s highest civilian award, which was also given to former U.S. President George W. Bush in 2008.

Among the guests at the state dinner were Sheikh Mansour bin Zayed; UAE Vice President; Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi; Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, Sheikh Tahnoon bin Zayed, UAE National Security Adviser; Sheikh Abdallah bin Zayed, the UAE Foreign Minister; and Yousef Al Otaiba, the UAE Ambassador to the U.S.

Khaldoon Al Mubarak, Managing Director and Group CEO of the Mubadala sovereign wealth fund, and Peng Xiao, CEO of AI tech company G42 were also present.

Senior U.S. officials at the state dinner included U.S. Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent, Defense Secretary Pete Hegseth and Martina Strong, U.S. Ambassador to the UAE.

UAE welcomes Trump amid anticipation of AI chip deals with U.S.

In the final leg of his tour through the Gulf’s royal palaces, U.S. President Donald Trump landed in Abu Dhabi on Thursday as G42 and other UAE tech firms awaited a green light for billions of dollars in advanced chip deals.

UAE President Sheikh Mohamed bin Zayed greeted the U.S. leader at Abu Dhabi’s exclusive Presidential Terminal after a brief flight on Air Force One from neighboring Qatar. Also on hand to welcome Trump were the President’s brothers, Vice President and National Security Adviser Sheikh Tahnoon bin Zayed, who is Chairman of G42, and Foreign Minister Abdullah bin Zayed.

Earlier in the day, Qatar hosted a business conference with Trump in the capital city of Doha and the president talked talked to U.S. soldiers at the Al Udeid U.S. Air Base, which has been an anchor for America’s security alliance in the Gulf.

The U.S. leader woke up in Doha after Emir Sheikh Tamim hosted a lavish state dinner at Lusail Palace on Wednesday night. On Trump’s arrival in Qatar, his motorcade passed sword dancers, parading camels and a royal honor guard mounted on Arabian stallions.

Today’s visit to the UAE is the last stop in his regional tour, which started on Tuesday when he landed in Riyadh and wraps up with Friday’s return to Washington.

Trump and close adviser Elon Musk spent two days in Saudi Arabia, hosted by Crown Prince Mohammed bin Salman and holding chats with corporate leaders from such powerhouses as Aramco, the Public Investment Fund, Nvidia, OpenAI, BlackRock and Citigroup.

In Abu Dhabi, where main roads are decked out with neon signs welcoming Trump, the president was expected to announce a preliminary agreement to let the UAE import 500,000 of Nvidia’s most advanced AI chips per year, starting in 2025, boosting the Emirates’ construction of data centers required for the highest level of AI development, Reuters reports.

Twenty percent of the chips will be allocated to UAE tech firm G42, and the remainder will be allocated to U.S. companies like Microsoft and Oracle that are building data centers in the UAE. The deal could potentially extend through 2027 or even 2030, according to the news agency.

The White House said Trump secured deals totaling more than $243 billion with Qatar after leaders from the Gulf peninsula state pledged some $1.2 trillion in American investment. The UAE has committed to investing $1.4 trillion in the U.S. over the next 10 years, while Saudi Arabia said it hopes to reach $1 trillion during Trump’s four-year term.

Among the largest deals was Qatar’s $96 billion plan to acquire as many as 210 Boeing 787 Dreamliner and 777X aircraft. The U.S. and Qatari governments also signed off on a $1 billion agreement for Raytheon to provide counter-drone capabilities to Qatar. General Atomics also secured a nearly $2 billion agreement for Qatar to acquire MQ-9B drones.

Qatar’s Prime Minister Sheikh Mohammed bin Abdulrahman, meanwhile, defended his country’s offer to Trump of a luxury jet to replace the 40-year-old Air Force One, telling CNN it was not an influence-buying effort.

“It is government to government. The transaction has nothing to do with personnel, whether it’s on the U.S. side or on the Qatari side,” he said, adding that Qatar is ready to withdraw the plan if it’s found to be illegal.

Trump hints at lifting AI chip restrictions ahead of trip to Gulf

Indications that President Donald Trump will modify or even scrap U.S. sanctions on the sale of advanced AI semiconductor chips are building anticipation for his trip to the Gulf next week.

A statement from the Commerce Department in Washington on Wednesday criticized the Biden-era rules – originated to fence in China and extended to a circle of U.S. allies including the UAE and Saudi Arabia – as “overly complex, overly bureaucratic” and a barrier to “American innovation.”

Following up a few hours later in response to questions from reporters in the Oval Office, Trump said: “We might be doing that, and it’ll be announced soon.”

Dubbed the Framework for Artificial Intelligence Diffusion, former President Joe Biden issued rules a week before he left office making it more difficult for foreign countries to buy the most advanced chips made by Nvidia that drew the greatest demand from providers of artificial intelligence services and AI developers.

The UAE, through its state-owned G42 firm and MGX fund, has placed AI at the center of its national ambitions to be a global tech leader.

Sheikh Tahnoon bin Zayed, the UAE’s National Security Adviser and Chairman of a network of government companies including G42 and MGX, appealed to Trump during a White House visit in March to lift the chip restrictions. One incentive was the $1.4 trillion investment package Sheikh Tahnoon announced that would be spent in the U.S. over 10 years.

The Emirati royal also met with Nvidia CEO Jensen Huang, and a constellation of other U.S. tech leaders with whom the UAE has forged billion-dollar partnerships to finance AI development and build massive AI data centers.

UAE data center firm Khazna sets sights on Saudi Arabian market

Khazna, the Dubai data center company backed by G42 and Microsoft, is preparing to make a major foray into Saudi Arabia.

CEO Hassan Alnaqbi tells Bloomberg that the company projects taking at least 25% of the kingdom’s market share as demand booms for power-hungry AI servers.

He said Khazna has 71% of the UAE’s current data center capacity and is looking beyond its home country with new funding from Abu Dhabi’s MGX fund and U.S. private equity firm Silver Lake.

Alnaqbi told The Circuit in an October 2024 interview that Khazna is investing in solar power and other sustainable energy sources to help fuel its data centers.

Microsoft bet on ‘edge’ computing brings AI closer to Mideast users

Microsoft, which invested $1.5 billion last year in Abu Dhabi’s G42 artificial intelligence firm, is rolling out new AI products tailored to customers across the Middle East and Africa.

Overseeing the campaign is Chris Papaphotis, who was in the UAE this week to launch the company’s Copilot+ series of Surface PCs, which integrate so-called “edge” AI technology that runs on users’ computers rather than on distant cloud-based servers.

“AI gets born in the cloud, but it will be used in the edge,” Papaphotis said in an interview with The Circuit.

The new PCs have been adapted to the region’s business and government market with bolstered Arabic-language capacities, said Papaphotis, 53, who started with Microsoft almost 30 years ago in his native Greece. Now he covers 109 countries as Senior Director for Central Europe, the Middle East and Africa of Device Partner Sales.

Microsoft, the world’s second-largest company after Apple, plans to invest approximately $80 billion globally this year in AI-enabled data centers, which include facilities in Saudi Arabia, the UAE and South Africa.

The firm is also a co-investor with BlackRock and Abu Dhabi’s MGX in the Global AI Infrastructure Investment Partnership, which launched last September with the goal of raising $100 billion in private equity capital.

The interview with Papaphotis has been edited for length and clarity.

Where are Microsoft’s investments concentrated now in the Middle East and Africa region?

Both in the cloud and on the edge. It’s an area that we are interested in. As you know, we have strategic relationships with G42, for example, significant investments from Microsoft as well, as well as investing in data centers across the region — Saudi Arabia, South Africa, and so forth. It is something that Microsoft invests heavily in. We know that the Middle East and Africa are opportunities for us. It’s great to see the governments being so interested because they understand that this is a kind of technology that, by investing now, you can leapfrog and shape the future. For example, creating Arabic LLMs (large language models), is really a keystone for that.

Why is edge AI becoming so important to the company?

Today, AI is a technology that was born in the cloud. It means that there was a lot of data and what we call the large language models that have been compiled through very huge data centers. We all know about the big investments in this area. Currently, a lot of people experience AI through this lens, meaning that you go, let’s say, to ChatGPT or Co-Pilot, and you ask a question, then it goes up in the cloud, and it crunches it. However, people understand that as we move along, AI will become much more of a personal assistant. And in order to really unlock the value that it can bring to you, it needs to have access to personal details. For reasons of privacy and security, it makes a lot of sense to actually have it on the edge. So maybe it’s a long-winded answer saying that AI gets born in the cloud, but will be used in the edge. And a lot of computing needs to exist in the edge to be able to do this for you and become very personalized and to suit your needs.

Q: What are the biggest opportunities and challenges you see for combining cloud and edge?

The truth of the matter is that there is really a generational shift in technology. AI is here to stay. It’s not like something that is just a fad. It will truly ingrain every single thing we do in our lives, from self-driving cars to AI agents, that we will be able to command and have tens or hundreds of them for personal or work tasks to enhance human productivity. I think we’ll look back in history and say this is great. Of course, it does take a responsible way to use it. It still has some limitations – for example, hallucinations and producing results that are not accurate. It’s important for us to understand how to use it properly to our benefit and understand the limitations so that we can sidestep them and have them under control. That’s why in Microsoft, we call them Co-Pilot. We feel that humans should always be pilots, and then there should be co-pilots next to us, giving us assistance, but we should always maintain control.

How has the experience of working for Microsoft changed over your three decades with the company?

I mean, it’s crazy. Honestly, I feel that it’s like working for a startup, although I have been working for so many years. And the reason is that in a startup, you have the sense of possibilities of something new that the whole world can actually see. If you think about it, we started with a vision of having one PC on every desk, and now it’s one AI per person across the world or even multiple ones depending on the different roles that you have. I think we’re just in the very beginning. Things have evolved tremendously, and to be quite honest, it’s part of the excitement that we don’t know where it’s going to lead us, but for sure there are going to be infinite possibilities.

Musk’s xAI, Nvidia join with MGX in artificial intelligence fund

The UAE’s biggest tech firms are capitalizing on White House support to tighten partnerships with America’s leaders in the booming industry of artificial intelligence.

A consortium created last year by Abu Dhabi investment fund MGX, Microsoft and BlackRock to finance power-hungry AI data centers welcomed chipmaker Nvidia and Elon Musk’s xAI to the group on Wednesday.

Expansion of the top-level venture came amid the Washington visit by Sheikh Tahnoon bin Zayed, the UAE National Security Advisor and Chairman of MGX and a constellation of other tech companies, who dined at the White House this week with President Donald Trump.

Sheikh Tahnoon, who held a meeting with Musk through a video feed on Wednesday, has been accompanied through the trip by Khaldoon Al Mubarak, the MGX Vice Chairman and CEO of the Mubadala sovereign wealth fund. Also on the visit is Dr. Sultan Al Jaber, CEO of the ADNOC national oil company and the UAE Minister of Industry and Advanced Technology. Peng Xiao, CEO of the Abu Dhabi-based AI company G42, joined the call with Musk.

Among the other meetings in his U.S. rounds, Sheikh Tahnoon said he “explored opportunities for collaboration and investment” with Oracle’s Larry Ellison.

ADQ, meanwhile, another Abu Dhabi sovereign wealth fund chaired by Sheikh Tahnoon, agreed to invest a combined $5 billion in a partnership with U.S-based Energy Capital Partners to build power stations for data centers and AI projects – with the investment eventually reaching $25 billion.

The announcement came as Nvidia CEO Jensen Huang told the company’s GTC conference in San Jose, Calif., that the industry is preparing for a massive leap in building data centers and chip manufacturing plants with accompanying energy demand.

“Over the next several years, we’re going to be building giant AI factories,” he said. Not normal AI factories … ones you see from space,” Huang said.

Abu Dhabi’s Multiply eyes $1B divestment from PAL Cooling

Abu Dhabi’s Multiply Group may be getting ready to divest from its PAL Cooling unit, which keeps the UAE capital’s skyscrapers at tolerable temperatures under the Gulf’s sizzling sun.

The firm, a unit of Sheikh Tahnoon bin Zayed’s International Holding Co., could raise as much as $1 billion if it’s put up for sale, Bloomberg reports.

PAL’S cooling technology involves pumping chilled water into buildings from centralized plants.

Multiply is working with Standard Chartered on the sale, which is at an early stage and has drawn interest from both regional and international investors, the news agency said.

Multiply went public more than three years ago and has investments in companies ranging from Getty Images to Rihanna’s lingerie company.

UAE’s Falcon Mamba breaks new ground in artificial intelligence

At a time that Microsoft is investing $1.5 billion with the UAE’s G42 artificial intelligence firm and Nvidia is consulting on new computer chip development, the Gulf state is turning into a regional research hub for commercial applications of AI technology. 

Leading much of the UAE’s international collaboration is Dr. Hakim Hacid, Chief Researcher at the Technology Innovation Institute’s Artificial Intelligence and Digital Science Research Center. It was in his lab, part of the Abu Dhabi’s Advanced Technology Research Center, that scientists developed Falcon Mamba, a new platform for AI architecture that can process massive amounts of data and was launched in August.

In an interview with The Circuit, Dr. Hacid describes Falcon Mamba’s ability to handle enormous  files without overloading memory capacity. The unique design makes it faster and more reliable for tasks that involve heavy data, such as analyzing video content and large-scale scientific data, where existing models struggle. He also explains how the government-owned research center decides where to devote its resources.

What is the scope of the Technology Innovation Institute’s research activities?

We are targeting the different priority sectors of the UAE. So you have transportation, healthcare, education, defense and security. Anything that is related to or is matching and can be mapped to these priority sectors, we go with it, definitely.

How do you decide that this is an important technology that you want to invest in?

Of course we do some research in the background to understand the potential of the technology. We are in the R&D context so we also take risks from time to time. This is what happened, for example, with generative AI. We have a lot of researchers who are capable of understanding the future of such technology and the potential. So, it’s not something that I would say is deterministic, but it’s more about mixing the expertise, the technical expertise, and also the business understanding of the environment and the ecosystem that helps us to decide.

What is Falcon Mamba and why did you decide to work on it?

You see we have different architectures on the ground. So the main architecture that everybody is following is the transformer-based, so all the models are built on a transformer-based architecture. We believe that we did not yet have the full potential of these models. So we need to look into how we could actually somehow open up this potential, so we have the hypothesis that the quality and the performance of this model is related to the data. So we work a lot on the data, but then on the architecture side, most of the things have been done. So most of the model providers, they have more or less the same things, where we can change here and there, few things soon. We thought that it would be interesting also to look into different ways and explore different architectures completely. So this is what we have done with the Falcon Mamba which is not built on the transformer side. It’s actually transformer-free. There is no transformer inside so far, and it actually relies on what we call the state space models that will allow you to actually control or to learn the changes of states for your architecture, which gives you actually more sort of flexibility and better management of all the resources that you have.

What are the applications for Falcon Mamba?

When you have a large amount of data that you need to handle, for example, when it comes to video and audio, if you have a one-hour or two-hour audio or video, it’s much, much bigger than the text that you have. Mamba is good for managing memory. Wherever you go large, it doesn’t go exponentially large when it comes to memory. So the target is when you have time series, videos, for example, audio, and it’s like genomes, for example, will be also a good application. 

You launched in August and what has happened with Falcon Mamba? 

We have a lot of people who are using it because it was the first big model that was, let’s say, actually launched using this architecture. So a lot of people are using it. A lot of people are taking it and fine-tuning it for several sorts of applications. From our side, we have been working, actually, on a bigger model than the one that we had before, with a better architecture, because of the opportunity of building that allowed us to learn a lot of things when it comes to the Mamba architecture. So there is a model that will be coming, hopefully soon.

What are the ongoing trends within the AI sphere that you have witnessed and in which you’re putting in some resources?

Well, we have, of course, the reasoning part that’s very important. So we want to have models that can actually think, that can reason on the questions and the prompt they receive. So before giving you the answer, it’s not just a matter of probabilistic calculations on the next token. But we need, we want also to integrate a way of thinking and reasoning to constrain the generation itself. You also have the stream of the multi-modality that is following. We continue in that we have proposed the model that handles images, understands images. Now we are working on things related to video, for example, and we should get this kind of thing soon. There is also the model safety. We invest a lot on that. So now our models are much more safer, so they are able to understand when a prompt will lead to a risk for the user, for example. So we are able to let the model know that it shouldn’t answer the questions that may result in harming the user or any human being.

How do you advise clients and potential clients on what to use when it comes to AI? 

I think it’s a matter of trying and failing so we learn from these things. We don’t have a deterministic approach, again, to consume and use this AI. It’s a matter of getting the AI trying different ways of making it usable in your context. And then, of course, give the time and make sure that the people who control the data, for example, are part of this process, because the data is the key at the end of the day. And if these people are not, let’s say, confident, or they are not comfortable in having this kind of AI, it will be complicated to put it in this.