Khaldoon Al Mubarak, CEO of Mubadala, Abu Dhabi’s sovereign wealth fund
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The world has yet to fully recognize the extent of the changes 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.
“In terms of risk … this is a technology that nobody really appreciates today, really the level of disruption it’s going to create, affecting everything from our lives, business, human capital, employment, every sector. to be disrupted,” Khaldoon said. Al Mubarak, CEO of the $330 billion fund, to CNBC’s Dan Murphy.
“And I think that while there’s a lot of opportunity, it also presents a significant amount of risk, which is unclear today, because technology is moving so fast and we’re all trying to catch up as much as possible.”
Al Mubarak described the effort Mubadala is making in AI and the infrastructure that supports growing technology, including data centers and chip manufacturing.
Mubadala is a founder and investor in MGX, an AI-focused investment vehicle in Abu Dhabi. The fund participated in OpenAI latest round of fundraising October, which raised 6.6 billion dollars. In the same month, AI-focused wealth fund company G42 announced a partnership 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 UAE operated by Microsoft as part of that G42 deal, which has been closely watched 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 capitalize on it.
“Demand will be extremely high in terms of enabling that technology,” he said. That means “the technology, the enablement of artificial intelligence, which is the infrastructure side of it — whether it’s energy, whether it’s transmission, but also all forms of technology, energy technology that will help drive this huge demand, I would also add data center construction, chip building.”
“When you look at a 10-year horizon, which is the way we look at these investments — we’re not looking at a year or two years, we’re looking at the next 5, 10, 20 years. And I think the growth in that demand is so strong, even if you take a conservative view, there is tremendous growth in that space,” Al Mubarak stressed.
“That’s what gives me great confidence. And I think that’s where I see, and we see, an opportunity.”
Still committed to China
Looking ahead to the global political scene, Al Mubarak said Abu Dhabi’s wealth fund plans to continue investing in China despite possible trade headwinds expected under the new Donald Trump administration and the country’s slowing economy.
“I remain, I would say, committed to investing in China,” Al Mubarak said, after being asked if the Asian economic powerhouse is a viable investment during the Trump era, particularly if trade tariffs are revived.
“Let’s look at the basics. When you look at the Chinese economy, it’s the second largest economy in the world. You’ve got a population of 1.4 billion people. You’ve got a significant middle-income population that’s growing. You’ve got constant GDP growth. I think these are all, let’s say, the basics frames how we look at China.”
The investment chief pointed to China’s major cities of Shanghai and Hong Kong posting double-digit returns as markets for 2024: The Shanghai Composite Index rose 12.7% last year and Hong Kong’s Hang Seng Index gained nearly 18% in 2024.
He also highlighted the Chinese government’s efforts to boost markets late last year by 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 it’s all challenging. I mean not just for China, I mean for the world, but I feel at the end of the day that there are enough pragmatic, reasonable, soft landings that would produce, I think, optimal outcome for all.”
Al Mubarak said Chinese policymakers should do more to shore up 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 key, especially given the way trade or the global trade situation has developed,” he told CNBC. “And anything that can help continue to strengthen the Chinese consumer market, I think is a positive signal to the markets.”
