The Daily Circuit: Nvidia plunge reverberates in Gulf + $8.7 billion for STC

👋 Hello from the Middle East!

In today’s Daily Circuit, we’re looking at STC’s $8.7 billion Saudi contract, Mohamed Alabbar’s $5.7 billion Georgia deal, Khalaf Al Habtoor’s pullout from Lebanon and U.S.-based Matternet’s Saudi approval to fly delivery drones. But first, reverberations from Nvidia’s record slide on Wall Street.

The emergence of DeepSeek, the Chinese startup whose artificial intelligence capabilities rival those of Nvidia, triggering a 17% plummet in the U.S. chipmaker’s shares, is being felt in the Gulf.

G42, International Holding Co. and other Abu Dhabi companies that have billions of dollars in active deals with Nvidia stand to lose if DeepSeek can follow through with its plans to provide advanced AI functions at a fraction of the cost. Nvidia’s market value plunged $589 billion on Monday.

Damac Properties Chairman Hussain Sajwani, for example, pledged $20 billion to U.S. President Donald Trump two weeks ago to build AI data centers, which may not ever be built if DeepSeek’’s technology proves itself.

“The introduction of DeepSeek’s cost-effective solutions has disrupted… anticipations of expansive investments in AI, leading to a sharp market correction,” Roberto d’Ambrosio, CEO of Axiory Global, told The Circuit’s Omnia Al Desoukie in Dubai.

“From a risk management perspective, this development underscores the perils of over-reliance on anticipated technological trajectories,” d’Ambrosio said, noting the possible downside for G42 and other companies backed by IHC – which is led by Sheikh Tahnoon bin Zayed, the UAE National Security Advisor and Chairman of sovereign wealth funds ADQ and ADIA.

“The rapid advancement of AI capabilities, coupled with the emergence of more affordable alternatives, necessitates a reassessment of investment strategies,” he said.

Welcome to the Daily Circuit. Kindly let us know your thoughts and feedback by replying to this newsletter or emailing us at [email protected].

📷 Photo of the Day

Israeli chef Eyal Shani brings Tel Aviv vibe to Dubai Marina

Eyal Shani, an evangelist for introducing Israeli cuisine to an international audience, says he feels liberated in Dubai.

“I can bring tomatoes and cucumbers from Lebanon, I can bring yogurt from Damascus, beautiful fruits and vegetables from Iran, cheeses from Iraq, and amazing fish from the Gulf – all the treasures of the East and West,” Shani, who opened a branch of his expanding North Miznon restaurant franchise in Dubai’s yacht-packed Marina district in December, said in an interview with The Circuit.

In Jerusalem, where Shani, 64, was born, the produce markets are still limited by political barriers with several of Israel’s neighbors. But in the United Arab Emirates, which normalized relations with Israel in 2020 under the Abraham Accords, the entire Middle East is accessible to his constant hunt for fresh and inspiring ingredients.

That has enabled the chef to create unconventional seafood dishes such as octopus shishlik, grouper shawarma and an item he calls “Journey into the Head of a Lokus,” which features a fish known in the U.S. as Dusky grouper bass. Among the many vegetable dishes on the menu are beetroot carpaccio, served with white horseradish snow and sour cream on the side; sabich 2.0,  described as an eggplant steak on a “storm of tomato and tahini with a spicy boiled egg”; and “whole animal artichoke.” The menu changes daily and sometimes includes the dish he became famous for in Israel, a full head of roasted cauliflower massaged with olive oil.

The Dubai restaurant, whose open kitchen allows diners to watch the chefs at work, is located in the Doubletree by Hilton-Jumeirah Beach hotel. It is Shani’s first in an Arab country, although his empire of nearly 50 locations includes various iterations in New York, London, Paris, Singapore, Vienna and Melbourne, Australia. In Israel, where Shani is a celebrity judge on the television show “Master Chef,” his Miznon chain became popular in Tel Aviv by serving unique dishes in freshly baked pita and paper bags. The North Miznon brand is more upscale.

“He is trying to bring the Israeli spirit and vibe,” Michal Divon, an Israeli journalist and television host working in Dubai for the UAE’s Khaleej Times newspaper, told The Circuit. “It’s the first proper Israeli establishment with an international name and reputation and can introduce people to what Israel is all about.”

Among other Israeli chefs who have opened restaurants around the world are Yotam Ottolenghi, Assaf Granit and Meir Adoni. Dubai has nine restaurants with Michelin stars and the list of superstar chefs who have branches in the city include London’s Gordon Ramsay, Hong Kong’s Alvin Leung and Pierre Gagnaire from Paris.

It was growing up in Jerusalem that led to Shani’s interest in Arab culture. He remembers as a child the fence that divided the city into Israeli and Arab sections and stirred his fascination with the other side, which was ruled by Jordan. After the Six-Day War in June 1967, Israelis were allowed to enter East Jerusalem and Shani found that interest in food was a way of bridging differences. He says having a restaurant in the Gulf is the fulfillment of a dream.

“In Israel we have two main borders. One is a border to the west – the Mediterranean Sea – and one is a border to the east,” said Shani, who cultivates the persona of a philosopher-chef with a gray beard and unruly head of hair. “The border to the west leads to Europe and the U.S., and the border to the east leads to all the Middle Eastern countries. That border was closed to us. Opening a restaurant in Dubai was a chance to go through that gate.”

Shani never visited the UAE until after signing a contract to open the restaurant. He was preceded by more than half a million Israelis who flocked to the small Gulf country in the wake of the Abraham Accords. With native Emiratis constituting barely 11.5% of the UAE’s population, the rest are expatriates who represent 200 different nationalities and create a vibrant cultural and culinary scene.

“Dubai is an unreal place,” he said. “You look and say to yourself maybe it’s a show or an illusion that they built especially for you – the big houses, the big buildings, the highways in the middle of one of the [toughest] deserts in the world. It can’t exist but it does.”

Shani works with a group of local partners who persuaded him to open the franchise in Dubai, including restaurant entrepreneur Alberto Barbieri.

“The simplicity of the food is welcome in a place where there are so many people trying to outdo each other,” Barbieri told The Circuit, adding that Shani “goes to the fish market and the menu is prepared based on what he finds there.”

Barbieri said North Miznon is just the first Eyal Shani restaurant his business group hopes to open. There are already Dubai plans for Miznon and HaSalon – a ritzier franchise the chef created that has a reputation for prompting guests to start dancing on the table. Abu Dhabi, the UAE’s more conservative capital, is also a target location.

Among Shani’s dozens of restaurants, only two are kosher and the one in Dubai is decidedly not. But some observant Jews living in the city got a chance to taste some North Miznon’s popular dishes in March when the kitchen was temporarily made kosher during the Jewish holiday of Purim.

“For the first time we have genuine top-of-the-line Israeli cuisine in Dubai, and it’s a sign of the normalization of Jewish life in Dubai,” said Ross Kriel, founder of Kosher Arabia, a catering operation that prepares meals for airlines and hotels. “It was very exciting that for the first time we were able to enjoy a kosher version of his menu in Dubai including his tomato mosaic and his famous cauliflower,” Kriel told The Circuit.

Shani says his audience is global and he would like to attract anyone in the Middle East who wants to help Jews and Arabs move beyond their conflicts.

“I’m doing my food for the hearts of the people and for uniting them together,” Shani said. “The first thought I had when I decided to do the restaurant is that I have a chance to show people we are coming for peace.”

Lebanon gas compromise draws praise from Israel and Hezbollah

Israeli Prime Minister Yair Lapid and the leader of Lebanon’s Iran-backed Hezbollah organization offered praise for the terms of a U.S.-brokered deal to resolve a 10-year dispute over maritime borders and offshore gas-drilling rights.

The proposed agreement over the Karish field in the Mediterranean Sea, the result of months of shuttle diplomacy by White House mediator and energy envoy Amos Hochstein, was presented to Lebanese President Michel Aoun on Saturday.

Lapid, speaking at a cabinet meeting in Jerusalem on Sunday, said that the agreement was undergoing legal review and would soon be submitted for government approval. “As we have demanded from the start, the proposal safeguards Israel’s full security-diplomatic interests, as well as our economic interests,” Lapid said in a statement.

Although the text of the proposal has not been made public, the Israeli prime minister indicated he was willing to accept compromise in his country’s maritime borders and sharing of revenues between the two enemy countries.

“We do not oppose the development of an additional Lebanese gas field, from which we will of course receive the share we deserve,” Lapid said. “Such a field will weaken Lebanon’s dependence on Iran, restrain Hezbollah and promote regional stability.”

Hezbollah chief Hassan Nasrallah, who has threatened repeatedly to attack Israel’s shipborne platform if it begins extraction of the gas without a negotiated agreement, welcomed the latest proposal as “a very important step” that may “open up wide horizons for the Lebanese people.” Hezbollah, which controls nearly half the seats in Lebanon’s 128-member parliament, is designated a terrorist organization by Israel and the U.S.

In a televised address, Nasrallah said Lebanon “can reach good results” when all elements in the government stand together. “We can extract our resources when we benefit from our strength and unity,” he said.

Nabih Berri, the speaker of Lebanon’s parliament who is also allied with Hezbollah, said that the U.S. offer is “positive” and “meets the Lebanese demands.”

Israel’s opposition leader and former prime minister, Benjamin Netanyahu, said he would not be bound by the agreement if he returns to power after the country’s Nov. 1 elections. “Lapid has no mandate to hand over to an enemy state sovereign territories and sovereign assets that belong to all of us,” he said in a tweet.

The resolution of the maritime border dispute does not bring the countries closer to an agreement over another crucial point of contention: the land border between Israel and Lebanon known as the “Blue Line,” Jewish Insider noted in an analysis of the Karish negotiations last week. Nor would it resolve tensions between Israel and Hezbollah, the Iranian proxy that plays a decisive role in Lebanese domestic and international affairs.

“This is exactly the problem. It doesn’t relate to the broader Israeli-Lebanese dynamic, in the sense that both sides understand that this is not a normalization agreement or peace agreement. It is not going to create a new relationship between Israel and Lebanon or anything of the sort,” Sarit Zehavi, an Israeli security analyst and the president of Alma, a research center focused on Israel’s northern border, told JI. “It will just enable us to get the gas out of the sea for both sides, which is very important for both sides.”