Abu Dhabi’s AI sector is getting ready for major disruption: asset manager Lunate is reportedly considering a $1 billion commitment to MGX, a state-backed artificial intelligence investment powerhouse overseen by Sheikh Tahnoon bin Zayed Al Nahyan.
According to a Bloomberg exclusive citing people familiar with the matter, fast-rising fund manager Lunate is said to have begun talks that could deepen Abu Dhabi’s bet on the global AI race, though no final decisions have been made yet.
To date, Lunate has already deployed $13.5 billion since its 2023 launch. A possible commitment to MGX (which is not your typical VC shop) could be huge.
Formed as a joint venture between top local AI player G42 and the sovereign wealth giant Mubadala, MGX has been steadily building a reputation in the region for big-ticket AI infrastructure funding.
MGX also participated in major OpenAI and xAI rounds, as well as the $30 billion-plus data centre and energy project alongside BlackRock and Microsoft. MGX’s scale is such that it may soon raise tens of billions from third-party investors, in a bid to position Abu Dhabi as a global AI innovation hub.
Lunate, backed by Abu Dhabi’s ADQ and Chimera Investment, is both a general partner and limited partner for heavyweights like BlackRock, Blackstone, and Brookfield.
What this means for India
If, in fact, Lunate goes with the commitment to MGX, it could also mean some Gulf capital to flow into global (and Indian) tech infrastructure. India has been growing its cloud data warehouses and global capability centres for a while now.
Moreover, the UAE and India have already signed MoUs to jointly deploy AI in sectors like energy, health, space, and supply chains, with pledges to share technology, talent, and investment. So, this could most definitely have a cascading effect on India’s AI ecosystem.
Abu Dhabi is the latest in the region looking to not merely ride the AI wave. It wants to shape it, and join the ranks of Elon Musk’s xAI, Microsoft, and OpenAI in a race to build the world’s AI backbone from the UAE.
