The world has yet to fully recognize the magnitude of the changes that artificial intelligence will bring to all aspects of human life, Abu Dhabi sovereign wealth fund CEO Mubadala told CNBC at the World Economic Forum from Davos.
“In terms of risks… it’s a technology that no one really appreciates today, really the level of disruption it’s going to create, affecting everything from our lives, our businesses, human capital, employment, all sectors are 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 are many opportunities, it also presents significant risks, which are not clear today because technology is changing very quickly and we are all trying to catch up as much as possible.”
Al Mubarak highlighted Mubadala’s efforts in the field of AI and the infrastructure that supports this 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 latest fundraiser in October, which raised $6.6 billion. The same month, G42, the wealth fund’s dedicated AI company, announced a partnership with OpenAI to develop AI in the UAE and regional markets.
Last year, Microsoft invested $1.5 billion in the 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 United Arab Emirates facility run by Microsoft as part of the G42 deal, which has been heavily scrutinized by U.S. lawmakers over security concerns.
Al Mubarak expressed optimism about the future of AI and the UAE’s ability to leverage its investment strategy to profit from it.
“The demand is going to be extremely high in terms of implementing this technology,” he said. That means “the technology, the AI, which is the infrastructure side – whether it’s energy, whether it’s transmission, but also all forms of technology, energy technology that’s going to help power this huge request, I would also add to this data center build, this chip build.
“When you look at a 10-year horizon, that’s how we look at these investments, we’re not looking at one year or two years, we’ll look at the next 5, 10, 20 years. And I think the growth of that Demand is so strong that even if you take a conservative view, there is overwhelming growth coming in this space,” Al Mubarak stressed.
“That’s what gives me a lot of confidence. And I think that’s where I see, and we see, the opportunity.”
Still committed to China
Regarding the global political landscape, Al Mubarak said the Abu Dhabi fund plans to continue investing in China despite anticipated potential trade hurdles under the new Donald Trump administration and the country’s economic slowdown.
“I remain, I would say, committed to investing in China,” Al Mubarak said, after being asked about the possibility of investing in the Asian economic powerhouse under the Trump era, particularly if tariffs were to be reinstated .
“Let’s look at the basics. If you look at the Chinese economy, it’s the second largest economy in the world. You have a population of 1.4 billion. You have a large middle-income population that is growing. You have consistent GDP growth, so I think those are all, let’s say, the basic frameworks of our view of China.
The investment chief highlighted major Chinese cities Shanghai and Hong Kong which have seen double-digit returns as markets for 2024: the Shanghai Composite Index rose 12.7% last year and l Hong Kong’s Hang Seng Index gained nearly 18% in 2024.
He also highlighted the Chinese government’s efforts to give markets a boost late last year by cutting interest rates and announcing large stimulus packages.
“I think from a consumer perspective, 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 a challenge. I think it’s not just for China, I think for the world, but I feel that ultimately there is enough room for pragmatic solutions, reasonable and soft landings that would, I think, produce an optimal outcome for all.
Al Mubarak said Chinese policymakers should do more to strengthen the country’s national economy, which slowed last year due to the housing market crisis, weak consumer spending, an aging population and geopolitical competition.
“Yes, I think the domestic economy is obviously crucial, especially given the changing trade or global trade situation,” he told CNBC. “And anything that helps continue to drive the Chinese consumer market is, I think, a positive signal for the markets.”
