Middle Eastern "tycoons" accelerate their layout, adding fuel to the AI boom.

GMTEightPP has learned that sovereign wealth funds in the Middle East are becoming key supporters of Silicon Valley's favorite AI. Countries rich in oil resources such as Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar have been seeking economic diversification and using technology investments as a hedge. Data from Pitchbook shows that in the past year, sovereign nations in the Middle East have increased their investments in AI companies fivefold. Two sources revealed that the newly established AI fund in the UAE, MGX, is one of the investors looking to participate in OpenAI's latest round of financing. This round of financing will value OpenAI at $150 billion. Few venture capital funds have the financial strength to compete with tech giants such as Microsoft Corporation (MSFT.US) and Amazon.com, Inc. (AMZN.US) with investments in the billions of dollars. However, these sovereign funds have no problem in raising funds for AI transactions. They represent investments for Middle Eastern countries that have benefited from rising energy prices in recent years. Goldman Sachs Group, Inc. predicts that by 2026, the total wealth of the Gulf Cooperation Council (GCC) member countries will increase from $2.7 trillion to $3.5 trillion. The size of Saudi Arabia's Public Investment Fund (PIF) has surpassed $925 billion and has been heavily investing as part of Crown Prince Mohammed bin Salman's "Vision 2030" initiative. PIF has invested in companies such as Uber Technologies, Inc. (UBER.US) and has also invested heavily in the LIV golf league and professional football. Mubadala in the UAE manages assets of $302 billion, Abu Dhabi Investment Authority manages assets worth $1 trillion. Qatar Investment Authority manages assets worth $475 billion, while Kuwait's fund management has exceeded $800 billion. Earlier, the Abu Dhabi-based MGX partnered with BlackRock, Inc., Microsoft Corporation, and Global Infrastructure Partners to establish AI infrastructure partnerships, aiming to raise up to $100 billion for data centers and other infrastructure investments. Established in March this year, MGX is a specialized AI fund, with Mubadala in Abu Dhabi and AI company G42 as its founding partners. According to Pitchbook data, Mubadala has also invested in OpenAI's competitor Anthropic, and is one of the most active venture investors, having completed 8 AI transactions in the past four years. Sources revealed that Anthropic rejected Saudi funding in the previous round of financing citing national security reasons. However, Saudi's PIF is in negotiations with U.S. venture capital firm Andreessen Horowitz to establish a $40 billion partnership. It has also established an AI fund called the Saudi Center for Artificial Intelligence (SCAI). The influx of cash into the AI field is not limited to the Middle East. Pitchbook data shows that the French sovereign fund Bpifrance has completed 161 AI and machine learning transactions in the past four years, while Singapore's Temasek has completed 47 transactions. Another fund supported by Singapore, GIC, has completed 24 transactions. The influx of cash has raised concerns among some Silicon Valley investors about the so-called SoftBank effect. It is reported that SoftBank's Vision Fund heavily invested in Uber Technologies, Inc. and WeWork, pushing the valuations of these two companies to astronomical levels before their IPOs. In 2019, SoftBank valued WeWork at $47 billion, but WeWork filed for bankruptcy last year.