Gulf-backed AI firms face hurdles despite billions in funding

AI firms that have raised billions of dollars from Gulf sovereign wealth funds and state-owned companies are running into trouble.

Many are discovering the pitfalls of required local partnerships and the difficulty of building and running data centers in the region, The Information reports.

AI chipmaker Groq, for instance, got a $1.5 billion commitment from Saudi Aramco but later had to cut its revenue projections because of the lack of data capacity in the region.

Rival Cerebras made what proved to be onerous concessions to Abu Dhabi’s G42 as part of a $300 million investment deal, the online news platform said.

In spite of the problems, foreign AI companies continue to seek cash from the Mideast’s biggest funds, The Information said.

ADNOC’s Al Jaber pledges sixfold increase in new U.S. investments

Dr. Sultan Al Jaber, the UAE Minister of Industry and Advanced Technology and Chief Executive of the state-owned ADNOC oil company, pledged to boost investments in the U.S. by sixfold during a conference in Washington.

Calling for a global overhaul of national power grids to accommodate the massive demands of artificial intelligence, Al Jaber told the Atlantic Council Global Energy Forum on Tuesday that the industry must upgrade its technology while utilizing the broadest menu of resources, including oil, gas, nuclear and renewables.

“You can’t run tomorrow’s technology on yesterday’s grid,” Al Jaber said. “Many of our grids were built for a completely different century.” 

XRG, ADNOC’s new international investment arm, plans to inject some $440 billion into the U.S. energy industry over the next decade, Al Jaber said.

The fund is an investor in Houston, Texas-based NextDecade’s Rio Grande LNG export facility while Abu Dhabi renewable energy company Masdar, partly owned by ADNOC, has developed 5.5GW of production and storage capacity “from coast to coast,”, Al Jaber said.

Touching on the war between Israel and Iran, Al Jaber called on all parties to show restraint. “The United Arab Emirates stands for dialogue, for de-escalation and diplomacy,” he said.

“We reaffirm our belief in peace over provocation, calm over confrontation and progress through partnership, and only partnership,” Al Jaber said.

Saudi Arabia pitches net-zero hotels at FII Brazil summit

As Saudi Arabia invests billions of dollars to adorn its western Red Sea coast with uber-luxe resorts, the kingdom is encouraging foreign tourists to relax on the beach secure in the knowledge that their state-of-the-art hotels are aiming for net-zero emissions.

Saudi Tourism Minister Ahmed Al-Khateeb told the 1,500 delegates attending the Future Investment Initiative Priority Summit in Brazil on Thursday that his nation is committed to sustainable tourism in its sprawling $1.5 trillion Neom mega-project, building developments that adhere to environmental best practices.

Speaking at the Copacabana Palace hotel overlooking Rio de Janeiro’s far-more-developed Atlantic coastline, Al-Khateeb laid down a welcome mat for international investors looking to sink money into the Saudi sand.

“The kingdom’s doors are open for business,” the Saudi minister said at the summit, a spin-off from the annual “Davos in the Desert” conference in Riyadh that is backed by the Public Investment Fund. “We are keen to provide a favorable environment for international investors, and the investment facilities aim to make doing business in the kingdom in the most efficient and the least expensive way.”

While home to Saudi Aramco, the world’s largest oil company, the Gulf nation is stressing its commitment to the environment at the Brazil conference. The PIF, Saudi Arabia’s sovereign wealth fund, issued a report on Thursday that highlighted the state mining company Ma’aden’s sustainability efforts, including projects for biodiversity management, vegetation improvement and the preservation of seaside mangrove tree thickets in coastal areas.

UAE likely to hit oil capacity target one year early

The UAE is likely to achieve its full oil capacity target of 5 million barrels a day more than a year earlier than expected, Bloomberg reports.

ADNOC, the state-owned oil company, is on course to reach the threshold by the end of next year or early 2026, which is ahead of the 2027 goal the company had set, according to people with knowledge of the operations.

The higher capacity will be a potential source of tension as OPEC+ debates new production quotas later this year, the news agency said.

OPEC and its partners have been restricting output for years to shore up the market and raise prices.

The UAE – which said this month that it had raised capacity from last year’s level – has been eager to use some of its spare volume, according to Bloomberg.

The country has occasionally clashed with Saudi Arabia on the issue, risking a split among the group three years ago, before a compromise was found.