Almost a decade ago, Gulf sovereign wealth funds drew sharp criticism from financial analysts for investing heavily in frontier technology. The investments often comprised speculative Silicon Valley ventures, rather than sticking to traditional portfolios of infrastructure, real estate, or public equities that provided steady returns.
Some of that criticism was warranted.
The Saudi’s PIF and Abu Dhabi’s Mubadala made sizeable investments in SoftBank’s debut $93 billion Vision Fund 1, launched in 2017. It saw high-profile missteps with “disruptor” startups, most notably WeWork which was forced to file for bankruptcy and restructure billions in debt. SoftBank was dubbed the “Nasdaq whale” for stoking the fevered rally in big tech stocks.
It’s a very different story today as the Gulf funds stand ready to reap multi-billion-dollar windfalls as stakeholders in SpaceX, tipped to make history on Wednesday with a $1.77 trillion listing.
The PIF-backed AI venture HUMAIN invested $3 billion into xAI’s $20 billion Series E round in February, shortly before it merged with SpaceX.
