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Khaldoon Al Mubarak, CEO of Mubadala, an Abu Dhabi sovereign wealth fund
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The world has yet to fully recognize the extent of change that artificial intelligence will bring to every aspect of human life, the CEO of Abu Dhabi’s sovereign wealth fund, Mubadala, told CNBC at the World Economic Forum in Davos.
“As for the risks … this is a technology that nobody today really appreciates, really the level of disruption that it will create, affecting everything from our lives, our businesses, human capital, jobs, every sector it’s going to be disrupted,” Khaldoon Al Mubarak, chief executive of the $330 billion fund, told CNBC’s Dan Murphy.
“And I think that while there is a lot of opportunity, it also presents a significant amount of risk, which today is not clear, because technology is moving so fast and we are all trying to capture as much as possible.”
Al Mubarak outlined the push Mubadala has made into AI and the infrastructure that supports the growing technology, including data centers and chip manufacturing.
Mubadala is a founding investor in MGX, Abu Dhabi’s AI-focused investment vehicle. The fund participated in OpenAI the last round of fundraising in October, which raised $6.6 billion. The same month, the dedicated AI company of the wealth fund G42 announced a collaboration with OpenAI to develop AI in the UAE and regional markets.
Last year, Microsoft invested $1.5 billion in G42in a deal that will see G42 use Microsoft’s cloud services to run its AI applications. And in December, Washington approved the export of advanced AI chips to a facility in the United Arab Emirates that is run by Microsoft as part of that G42 deal, which was heavily scrutinized by US lawmakers over security concerns. .
Al Mubarak expressed optimism about the future of AI and the UAE’s ability to leverage its investment strategy to benefit from it.
“The demand is going to be very high in terms of enabling that technology,” he said. This means “the technology, the AI enablement, which is the infrastructure side – whether it’s energy, whether it’s transmission, but also all forms of technology, of energy technology that will help feed this huge demand, I would also add to that data center build-out, chip build-out.”
“When you look at a 10-year horizon, which is how we look at these investments – we’re not looking at one year or two years, we’re looking at the next 5, 10, 20 years. I think the growth of that demand is so strong, even though and you take a conservative view, there is excessive growth coming in that space,” Al Mubarak stressed.
“That’s what gives me a lot of confidence. And I think that’s where I see, and we’ll see, the opportunity.”
Still busy in China
In view of the global political landscape, Al Mubarak said that Abu Dhabi’s wealth fund plans to continue investing in China despite potential trade headwinds anticipated under a new administration of Donald Trump and the country’s economic slowdown.
“I am, I would say, committed to investing in China,” said Al Mubarak, after being asked whether the Asian economic power is investable during the Trump era, particularly if trade tariffs are to be revived.
“Let’s look at the basics. When you look at the Chinese economy, it’s the second largest economy in the world. You have a population of 1.4 billion people. You have a significant middle-income population that is growing. You have a growth of GDP consistently. So I think these are all, let’s say, the basic frameworks of how we look at China.”
The investment manager pointed to the big Chinese cities of Shanghai and Hong Kong that saw double-digit returns as markets for 2024: the Shanghai Composite Index rose by 12.7% last year, and the Hong Kong’s Hang Seng index has gained almost 18% in 2024.
He also noted the Chinese government’s efforts to give markets a boost toward the end of last year, cutting interest rates and announcing broad stimulus plans.
“I think on the consumer side, China has a lot to offer, and I think it will continue to provide good opportunities,” he said. “Tariffs, trade, wars, whatever word you want to use, I think these are all challenges. I think not only for China, I think for the world, but I feel at the end of the day, there is enough for the pragmatic. , reasonable and soft landings that will generate, I think, an optimal result for everyone”.
Al Mubarak said Chinese policymakers should do more to boost the country’s domestic economy, which has slowed in the past year due to a housing market crisis, sluggish consumer spending, an aging population and geopolitical competition.
“Yes, I think the domestic economy is obviously crucial, especially given the way trade or the global trade situation has evolved,” he told CNBC. “And something to help continue to strengthen the Chinese consumer market, I think that’s a positive signal for the markets.”
