MGX Eyes $25B Raise for AI Expansion
Abu Dhabi’s MGX, a formidable investment group established by Mubadala Investment Co. and AI firm G42, is reportedly exploring plans to raise a substantial $25 billion from third-party investors. This significant capital infusion would accelerate the group’s already ambitious artificial intelligence portfolio, marking a notable shift for Abu Dhabi, which traditionally acts as an exporter of capital rather than a solicitor of external funds.
The potential fundraising initiative underscores Abu Dhabi’s burgeoning commitment to becoming a global powerhouse in the AI domain. MGX, launched in 2023, is chaired by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and brother of UAE President Sheikh Mohammed bin Zayed. Its strategic focus spans three critical areas: AI infrastructure, including data centers and connectivity; semiconductors, encompassing logic and memory chip design and manufacturing; and core AI technologies and applications, such as AI models, software, data, life sciences, and robotics.
This drive for external capital highlights the immense financial requirements of scaling AI investments, even for a region renowned for its vast sovereign wealth. Abu Dhabi’s sovereign wealth funds, including the Abu Dhabi Investment Authority (ADIA) and Mubadala, collectively manage nearly $1.8 trillion, with a growing portion now strategically allocated to technology and AI ventures. The move by MGX to seek outside investment signals a recognition that collaborative funding and risk-sharing are essential to compete in the hyper-competitive global AI landscape, where private AI investment in the U.S. alone reached $109.1 billion in 2024.
MGX has already made significant strides in its AI pursuits. The group has notably backed industry leaders like OpenAI and Elon Musk’s xAI. Furthermore, it has forged a strategic alliance with BlackRock and Microsoft on a $30 billion initiative aimed at developing advanced data warehouses and energy infrastructure. Recent reports also indicate that MGX is in discussions with French AI startup Mistral for a potential $1 billion investment, which could value the company at $10 billion.
The broader context for this aggressive push is the UAE’s comprehensive national AI strategy, which aims to position the country as a top AI hub by 2031. AI is projected to contribute an impressive $96 billion, or 14% of the GDP, to the UAE economy by 2030. This vision is supported by robust government backing, attractive tax incentives, and efforts to cultivate a deep pool of international talent, solidifying Abu Dhabi’s appeal as a prime destination for AI and tech investments. Recent developments, such as the UAE-US deal to establish the largest AI campus outside North America in Abu Dhabi, underscore the nation’s commitment to building world-class digital infrastructure, with “compute” increasingly seen as the new oil. This ambitious plan also includes a commitment to train 100,000 AI professionals by 2031. A recent report by Deloitte and the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) indicates that 69% of Middle Eastern organizations plan to increase AI investments in the coming year, reflecting strong regional confidence and a strategic shift towards knowledge-based economies.
The potential $25 billion capital raise by MGX is not just a financial transaction; it represents a pivotal moment in Abu Dhabi’s strategic pivot toward a future powered by artificial intelligence, cementing its role as a key player on the global technology stage.