RIYADH: Middle Eastern funds have reaped exceptional gains from their bets on newly listed Chinese artificial intelligence companies, defying a broader sell-off in global stock markets triggered by the ongoing conflict in the Gulf.
The Abu Dhabi Investment Authority’s $65 million investment, which it made as a lead investor in MiniMax Group, has increased more than sixfold, reaching over $400 million as of the close on March 24, since the company’s Hong Kong listing in January.
Meanwhile, Aramco Ventures’ pre-initial-public-offering investment of around $30 million in Knowledge Atlas Technology, also known as Zhipu, has jumped to approximately $415 million since its listing earlier this year.
The two Chinese companies are among the best-performing listings this year in deals that have raised more than $500 million. MiniMax and Zhipu went public in January, becoming some of the first generative AI companies to go public after the launch of the ChatGPT model, contributing to a strong month for listings in Hong Kong.
How is the Gulf balancing its investments between the US and China?
The surge in the companies’ shares since then highlights a strong appetite for Chinese companies in this sector, contrasting with a global sell-off.
Attacks on energy and infrastructure targets across the Middle East last month disrupted oil markets and weighed on stocks, amid concerns about the potential disruption of critical assets such as data centers in the Gulf.
ADIA, with assets estimated at around $1 trillion, is one of the world’s largest sovereign wealth funds, while Aramco Ventures oversees assets of nearly $7 billion.
While investments in AI companies represent a small fraction of total spending, they come at a time when Middle Eastern investors face the delicate challenge of balancing their two largest markets — the US and China.
Several Gulf entities have sought to reduce their ties with China and have committed to investing in key Western markets. Others, however, have indicated they are still exploring investment opportunities in Beijing, while avoiding deals that might raise concerns in Washington.
Gulf funds continue to invest despite Iran war
A unit of Saudi Arabia’s Public Investment Fund agreed to acquire the gaming company Moonton from ByteDance for $6 billion earlier this month.
ADIA previously invested in the $4 billion listing of home appliance maker Midea Group in Hong Kong and participated in an $8.3 billion deal for the shopping mall management unit of Dalian Wanda Group, alongside Mubadala Investment Co.
Middle Eastern sovereign wealth funds have emerged as major dealmakers in recent years, spending hundreds of billions of dollars globally across sectors ranging from finance and technology to sports.
Even amid the recent conflict, funds like ADIA have continued to pursue global deals.
The UAE, Saudi Arabia, and Qatar pledged trillions of dollars in investments in the US when President Donald Trump visited the country last year.
Last week, the UAE ambassador to the US reaffirmed his country’s commitment to the US, despite concerns that a prolonged war with Iran could strain public finances in the Gulf states.
