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A new Abu Dhabi investment company is in talks to back OpenAI’s ambitious chip venture, in the latest effort by the United Arab Emirates to become a global powerbroker in the development of artificial intelligence.
State-funded MGX is in early stage discussions over a funding deal with OpenAI, according to two people with knowledge of the discussions. The US start-up’s chief executive Sam Altman is seeking to launch a semiconductor business to reduce its dependence on cutting-edge chips made by Nvidia.
Estimates from Altman and others of the cost of building out AI infrastructure have varied from hundreds of billions of dollars to as high as $7tn over the coming years.
Such figures price out traditional technology venture capitalists, leading the group to approach nation-states. The Financial Times this month reported that OpenAI was also holding talks with Singapore-backed Temasek over a funding deal.
MGX, an AI-focused fund that launched this week, is chaired by the UAE’s powerful national security adviser Sheikh Tahnoon bin Zayed al-Nahyan. The nation is betting its wealth, abundant energy resources and the political backing of the autocratic state’s leadership give it a head start in the race to become a global AI hub.
“They’re looking at creating a structure that will put Abu Dhabi at the centre of this AI strategy with global partners around the world,” said a person briefed on the fund.
The UAE’s AI minister Omar Sultan Al Olama told the FT that Tesla chief Elon Musk — who has launched xAI, a company building AI models in an effort to rival OpenAI — was also interested in partnerships with the Gulf state.
“I do see him [Musk] doing something [AI-related] here,” said Olama, adding that he first met the billionaire in 2017 and has done so multiple times since. “I don’t think it’s far out for him to do something here,” said Olama. “The economics are going to dictate what he and others do here.”
Musk did not respond to a request for comment.
Sheikh Tahnoon, a brother of UAE President Sheikh Mohammed bin Zayed al-Nahyan, oversees a sprawling $1.5tn empire that includes two sovereign wealth funds as well as private businesses.
He chairs G42, a UAE-based group of AI-focused companies, which is backed by Abu Dhabi sovereign investment fund Mubadala and boasts partnerships with OpenAI, Microsoft and Cerebras.
By setting up MGX, in partnership with G42 and Mubadala, Sheikh Tahnoon said in a statement that Abu Dhabi was establishing a “national champion” for AI that would “further advance the UAE’s role as a home and ecosystem for top technology talent, investors and entrepreneurs”.
AI’s top players such as Altman and Nvidia chief Jensen Huang have been attracted by the UAE’s ambition and financial firepower. The Gulf nation was an early mover in the nascent industry, appointing the world’s first AI minister in 2017 and opening the world’s first AI-focused graduate university two years later. The state has “been talking about AI since before it was cool”, said Altman at an event in Abu Dhabi last year.
Olama said the country also has a “backlog” of expensive Nvidia graphics processing units (GPUs), the semiconductors used to power large language models.
“We need to constantly increase the stockpile to match with the ambitions that we have and the direction that we’re going in,” said the AI minister. “[T]here’s going to be a constant flow of investment from the UAE in this domain”
Yet the UAE’s plans have also required navigating the trade tensions between the US and China. In particular, Washington has raised concerns about G42 and its ties to Chinese companies including Huawei, which have been blacklisted by the US.
Sheikh Tahnoon visited Washington in June, where he discussed issues including “the importance of building trusted technology ecosystems”, according to the White House. Following his trip, the UAE took a strategic decision to prioritise access to US tech partners, people familiar with the leadership’s thinking said.
G42 has since cut off its China partners and sold off its investments in the country — the latter move welcomed by Mike Gallagher, chair of the House select committee on the Chinese Communist party, who has been a vocal critic of the Abu Dhabi-based company.
Olama said the UAE was not making a political decision to favour the US over China in any AI-related venture. “The UAE does not have an agenda that we’re only going to work with one partner . . . It’s always economics.”
He added: “We want to ensure that AI is being applied in ways that are non-controversial, that can help us in the long term, that are responsible and are led by Emiratis if we can. And if not, that we work with the best partner globally.”
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