Abu Dhabi-based asset manager Lunate is exploring a potential capital commitment of up to $1 billion with MGX, the emirate’s state-backed artificial intelligence investment vehicle, as the Gulf state intensifies its push to dominate global AI financing.

The discussions are ongoing, and no final decisions have been made, according to the people familiar with the matter, as reported by Bloomberg.

Abu Dhabi’s growing AI investment machine

MGX has positioned itself as a major player in artificial intelligence infrastructure since G42 and Mubadala Investment Co. established the venture in March 2024. The firm, which is led by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser, was launched with aspirations to oversee $100 billion in assets and has been able to assemble a portfolio spanning the AI ecosystem’s most valuable companies.

MGX has stakes in OpenAI and has also committed capital to Elon Musk’s xAI venture. Earlier in the year, it joined the Stargate Project alongside OpenAI, SoftBank, and Oracle. MGX has a $30 billion collaboration with Microsoft and BlackRock to develop data infrastructure for AI applications.

The firm concentrates its investments across three domains, which are the physical infrastructure required for AI computing, semiconductor design and production capabilities, and the software and applications layer, including life sciences and robotics.

However, its checks are not limited to those areas, as it reportedly invested $2 billion in the world’s largest cryptocurrency exchange, Binance, earlier this year. Binance reportedly called the deal its first institutional investment.

Bloomberg reported in August that MGX was preparing to raise as much as $25 billion from third-party investors.

Lunate’s rise and links to the Sheikh

Since its establishment two years ago, Lunate has put $13.5 billion to work across global markets, following a $17 billion raise for its primary investment vehicles in 2024.

The asset manager has a working relationship with premier global institutions, including BlackRock, Blackstone, CVC Capital Partners, and Brookfield Asset Management.

Lunate has an investment in OpenAI and operates with backing from Abu Dhabi’s ADQ sovereign wealth fund and Chimera Investment, both falling under Sheikh Tahnoon’s oversight. While describing itself as independently managed, Chimera Investment maintains majority ownership, with Lunate’s three managing partners holding minority stakes.

Sheikh Tahnoon’s influence extends across assets exceeding $1.4 trillion, encompassing the Abu Dhabi Investment Authority’s $1 trillion portfolio alongside MGX, G42, ADQ, and First Abu Dhabi Bank, and the potential transaction with Lunate will contribute to that war chest.

The UAE government has shared its ambitions to achieve AI superpower status by 2031. In March, the UAE committed to a 10-year $1.4 trillion investment program with the United States, targeting AI infrastructure, semiconductors, energy, and advanced manufacturing.

So far, Gulf sovereign wealth funds have been major investors in the AI development space as they seek to diversify their economies beyond oil revenues.

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