Abu Dhabi’s $330 billion wealth fund warns of AI disruption
Khaldoon Al Mubarak, CEO of Mubadala, the Abu Dhabi sovereign wealth fund
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Abu Dhabi sovereign wealth fund CEO Mubadala told CNBC at the World Economic Forum in Davos that the world has not yet fully realized the extent of the changes that artificial intelligence will bring to every area of ​​human life.
“In terms of risks… this is a technology that nobody really appreciates today, the level of disruption it will create, affecting everything from our lives, to our businesses, to human capital, to employment, to every sector. Khaldoon Al Mubarak, managing director of the $330 billion fund, told CNBC’s Dan Murphy.
“And I think that while there’s a lot of opportunity, it also presents a significant risk that’s not clear today because technology is moving so fast and we’re all trying to catch up as much as possible.”
Al Mubarak noted Mubadala’s push for artificial intelligence and the infrastructure that supports emerging technology, including data centers and chip manufacturing.
Mubadala is a founding investor in MGX, Abu Dhabi’s AI-based investment vehicle. The foundation participated in OpenAI final fundraising round 6.6 billion in October. That same month, the wealth fund’s private AI company G42 announced a partnership with OpenAI to develop artificial intelligence in the UAE and regional markets.
Last year Microsoft It invested $1.5 billion in G42In a deal that shows the G42 will use Microsoft’s cloud services to run AI applications. In December, Washington approved the export of advanced artificial intelligence chips to the UAE as part of the G42 deal, which is run by Microsoft and has been scrutinized by US lawmakers over security concerns.
Al Mubarak expressed optimism about the future of artificial intelligence and the UAE’s ability to use its investment strategy to benefit from it.
“Demand is going to be very high in terms of putting this technology to work,” he said. That means “the technology, the AI ​​capabilities that are the infrastructure side of it — whether it’s power, whether it’s transmission, all forms of technology, power technology that will help meet that huge demand, I would add that data center building, chip building.”
“When you look at a 10-year horizon, which is how we look at these investments – we’re not looking at one or two years, we’re looking at the next 5, 10, 20 years. And I think the growth in that demand is so strong that even if you take a conservative view, there is a tremendous growth in this space,” Al Mubarak stressed.
“It gives me a lot of confidence. And I think I see here and we see the opportunity.”
Still loyal to China
Anticipating the global political landscape, Al Mubarak said Abu Dhabi’s wealth fund plans to continue investing in China despite potential trade headwinds and the country’s economic slowdown under the new administration of Donald Trump.
“I would say I’m committed to investing in China,” Al Mubarak said after being asked whether Asia’s economic power under Trump could be invested in, particularly if trade tariffs were reinstated.
“Let’s look at the basics. If you look at the Chinese economy, it’s the second largest economy in the world. You have a population of 1.4 billion. You have a growing significant middle-income population. There’s been consistent growth in GDP. So I think all of these, let’s say , are key frameworks for how we view China.
The investment executive pointed to China’s megacities Shanghai and Hong Kong as markets for double-digit returns in 2024: The Shanghai Composite Index rose 12.7% last year and Hong Kong’s Hang Seng index is up nearly 18% in 2024.
He also noted the Chinese government’s efforts to boost markets late last year by cutting interest rates and announcing broad stimulus plans.
“On the consumer side, I think China has a lot to offer and I think it will continue to provide good opportunities. “Tariffs, trade, wars, whatever word you want to use, I think it’s all difficult. I think not only for China, but for the world, but at the end of the day, I feel like there’s enough to be pragmatic. , I think everybody reasonable, gentle descents that will produce optimal results for
Al Mubarak said Chinese policymakers must do more to boost the country’s domestic economy, which has slowed over the past year due to a property market crisis, sluggish consumer spending, an aging population and geopolitical competition.
“Yes, I think the domestic economy is obviously crucial, especially given the development of trade or the global trade situation,” he told CNBC. “And anything that will continue to increase the Chinese consumer market is, I think, a positive signal for the markets.”
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