Record Gains for Middle Eastern Funds from Chinese Artificial Intelligence Companies

SadaNews - Middle Eastern funds have achieved exceptional gains from their investments in newly listed Chinese artificial intelligence companies, challenging a broader sell-off in global stock markets caused by the ongoing conflict in the Gulf.

The $65 million investment by the "Abu Dhabi Investment Authority," which entered as a major investor in "MiniMax Group," has risen more than sixfold, reaching over $400 million as of Tuesday's close, since the company's listing in Hong Kong in January.

Meanwhile, "Aramco Ventures'" pre-IPO investment of about $30 million in "Knowledge Atlas Technology," known as "Zibo," has jumped to approximately $415 million since its listing earlier this year.

How does the Gulf balance its investments between the U.S. and China?

The rise in the stocks of both companies since then highlights a strong appetite for Chinese firms in this sector, contrasting with a global sell-off. Attacks on energy and infrastructure targets throughout the Middle East in the last month have disrupted oil markets and pressured stocks amid concerns about potential disruptions to vital assets such as data centers in the Gulf.

The "Abu Dhabi Investment Authority," which is estimated to have assets of around $1 trillion, is among the largest sovereign wealth funds in the world, while "Aramco Ventures" manages roughly $7 billion in assets.

Although investments in artificial intelligence companies represent a small percentage of overall spending, they come at a time when investors in the Middle East are facing a delicate challenge of balancing their largest markets - the U.S. and China.

Gulf Funds Continue to Invest Despite Iran War

A subsidiary of the Saudi "Public Investment Fund" agreed to purchase the gaming company "Moonton" from "ByteDance" for $6 billion earlier this month.

Previously, the "Abu Dhabi Investment Authority" had invested in the listing of "Media Group" for household appliances worth $4 billion in Hong Kong, and also participated in a deal worth $8.3 billion for the mall management unit of "Dalian Wanda Group," along with "Mubadala Investment Company."

Middle Eastern sovereign wealth funds have emerged as key players in deal-making in recent years, spending hundreds of billions of dollars globally across sectors ranging from finance to technology to sports. Even amid the recent conflict, funds such as the "Abu Dhabi Investment Authority" have continued to pursue global deals.

The UAE, Saudi Arabia, and Qatar pledged to inject trillions of dollars in investments into the United States when President Donald Trump visited the country last year.

Last week, the UAE ambassador to the U.S. renewed his country’s support for its commitments to the United States, despite concerns that a prolonged war with Iran could strain the public finances of Gulf states.

Several Gulf entities have sought to reduce their ties with China and have committed to injecting investments into major Western markets. In contrast, other entities have stated that they still look for investment opportunities in Beijing while avoiding deals that might raise concerns in Washington.

The two Chinese companies are among the best-performing listings this year within deals that raised over $500 million. "MiniMax" and "Zibo" debuted their shares for public subscription in January, becoming among the first generative artificial intelligence companies to go public following the launch of the "ChatGPT" model, contributing to a strong month for listings in Hong Kong.