Gulf sovereign wealth funds are among those hit by the AI sell-off
Globally, sovereign wealth funds and public pension investors hold about $335.5 billion of exposure to AI companies, according to consultancy GlobalSWF.
Sovereign wealth funds, including some from the Gulf region, are among the major victims of the AI sell-off, with their listed portfolios losing $30.5 billion since the end of June. Globally, these funds and public pension investors collectively hold $335.5 billion worth of exposure to AI companies, according to consultancy GlobalSWF. The Gulf funds have significantly contributed to this total, both at home and internationally, by investing in AI firms through private funding rounds and as they go public.
Among the Gulf funds with notable exposures is Abu Dhabi's Mubadala, which may have seen its portfolio decline by $17.5 billion, largely due to a more than 50% drop in the stock of chipmaker GlobalFoundries. Similarly, Saudi Arabia's Public Investment Fund (PIF) is estimated to have experienced a $5.64 billion decrease in the value of its AI investments, primarily linked to its stake in SpaceX.
Despite the downturn in the stock market, it is improbable that sovereign funds will entirely abandon their AI strategies. Daniel Brett, head of research at GlobalSWF, stated, "We would not expect strategic investors to retreat wholesale from AI." He added, "Lower valuations could present opportunities for long-term funds to increase exposure selectively, though this does not suggest an imminent market rebound."
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