Abu Dhabi’s $330 billion wealth fund warns of AI disruption
Khaldon Al Mubarak, CEO of Mubadala, Abu Dhabi’s sovereign wealth fund
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Mubadala, CEO of Abu Dhabi’s sovereign wealth fund, told CNBC at the World Economic Forum in Davos that the world has not yet fully realized the extent of the changes artificial intelligence will bring to all human lives.
“In terms of the risk … this is a technology that no one understands today, the level of chaos it will actually create, affecting everything from our lives, to our businesses, to human capital, to jobs, to every sector,” Khaldon al-Mubarak, managing director of the $330 billion fund, told CNBC’s Dan Murphy.
“And I think that although there are many opportunities, it presents a large amount of risk, which is not clear today, because the technology is moving fast and we are all trying to catch it as much as possible.”
Al Mubarak Mubadala described data centers and chip manufacturing as infrastructures that support AI and emerging technologies.
Mubadala is a founding investor in MGX, an Abu Dhabi AI-focused investment vehicle. The fund participated in OpenAI’s latest fundraising round, which opened in October, raising $6.6 billion. That same month, the hedge fund announced a partnership with independent AI company G42 with OpenAI to develop AI in the UAE and regional markets.
Last year, Microsoft invested $1.5 billion in G42. And in December, Washington approved the export of advanced AI chips to the United Arab Emirates as part of the G42 agreement, which is managed by Microsoft and has been heavily scrutinized by US lawmakers over security concerns.
Al Mubarak spoke about the future of AI and the UAE’s ability to leverage its investment strategy.
“Given the potential of the technology, the demand will be very high,” he said. This means that “the technology, the end of AI, it’s the infrastructure side – whether it’s power, whether it’s transmission, but all kinds of technology, energy technology that helps to develop this great demand, I would add. That data center building, chip building-out.
“When you look at the 10-year horizon, which is how we look at these investments — we don’t look at one year or two years, we look at the next 5, 10, 20 years. And I think the growth in that demand is very strong, even if you take a conservative view, in that space. A tremendous progress is coming,” Al Mubarak emphasized.
“That’s what gives me a lot of confidence. And I think that’s what I see, and we see the opportunity.”
He is still committed to China.
Looking ahead to the global political environment, Al Mubarak said Abu Dhabi’s wealth fund plans to invest in China despite the new Donald Trump administration and expected business headwinds from the country’s economic slowdown.
“I would say I’m committed to investing in China,” Al Mubarak said after being asked if the Asian economic powerhouse could invest in the Trump era, especially if trade tariffs were to be renewed.
“Let’s look at the basics. When you look at China’s economy, it’s the second largest economy in the world. You have 1.4 billion people. You have a growing middle-income population. You have a steady growth in gross domestic product. So these are all, let’s say, the basics of how we look at China. I think they are frameworks.”
The investment chief pointed to major Chinese cities Shanghai and Hong Kong as markets that saw double-digit returns to 2024: The Shanghai Composite Index rose 12.7% last year, and Hong Kong’s Hang Seng Index gained nearly 18% in 2024.
He pointed to the Chinese government’s efforts to boost markets by lowering interest rates and announcing broad stimulus plans at the end of last year.
“I think on the consumer side, China has a lot to offer and I think it will continue to offer great opportunities,” he said. “Tariffs, trade, wars, whatever word you want to use, I think these are all challenges. I think not only for China, but for the world, but I feel at the end of the day, there is enough to be fair. I think reasonable, soft landings are a good outcome for everyone.”
Al Mubarak said China’s policymakers should do more to strengthen the country’s domestic economy amid a property market crisis last year, a slowdown in consumer spending, an aging population and geopolitical competition.
“Yes, I think the domestic economy is obviously critical, especially after trade or global trade conditions change,” he told CNBC. “I think anything that helps the Chinese consumer market grow is a positive sign for the markets.”