A potential pullback by Middle East sovereign wealth funds could drain hundreds of billions of dollars from the artificial intelligence boom and threaten key data center projects, according to tech investor Jack Selby.
Middle East investors — including sovereign wealth funds and government entities — account for roughly a quarter of global investments committed to AI over the next five years, said Selby, managing director of Peter Thiel’s family office, Thiel Capital. If the war in Iran drags on, and the United Arab Emirates, Saudi Arabia and other countries divert their investments to rebuilding at home, the lost capital could ripple through data centers as well as public and private tech companies, he said.
“I think markets have underappreciated how important the Middle East region is for capex spending as it relates to AI and AI infrastructure,” Selby told CNBC in an interview. “If the Middle East starts taking some of these projects offline or canceling some of these projects, the impact on the market could be much, much, much larger than what they currently suggest.”
Selby’s warning has implications for high-net-worth investors, family offices and funds betting on the AI trade. A Wall Street Journal report this week about missed revenue targets at OpenAI rattled tech and chip stocks. Selby said the Middle East poses another funding risk, as AI companies grew more dependent on the region for capital.
