Abu Dhabi's $330-Billion Fund Warns: AI's Disruption is Unappreciated

Abu Dhabi's $330-billion sovereign wealth fund, Mubadala, has sounded the alarm on the impending disruption that artificial intelligence (AI) is set to unleash. In an interview with CNBC at the World Economic Forum in Davos, Khaldoon Al Mubarak, the managing director of the fund, emphasized that the extent of change AI will bring to every aspect of human life is yet to be fully recognized.

"In terms of the risks... this is a technology that no one today really appreciates, truly the level of disruption that it's going to create, affecting everything from our lives, our businesses, human capital, employment, every sector is going to be disrupted," Al Mubarak said. He went on to explain that while there are significant opportunities presented by AI, the technology also presents substantial risks that are currently unclear due to its rapid evolution.

Mubadala has been making significant investments in AI and the infrastructure that supports the burgeoning technology, including data centers and chip manufacturing. The fund is a founding investor in MGX, Abu Dhabi's AI-focused investment vehicle, and has taken part in OpenAI's latest fundraising round. Additionally, Mubadala's dedicated AI company, G42, has announced partnerships with OpenAI to develop AI in the UAE and regional markets.

Al Mubarak expressed optimism about the future of AI and the UAE's ability to leverage its investment strategy to take advantage of it. He noted that the demand for AI technology is expected to be profoundly high, leading to significant growth in the sector over the next decade. This optimism is reflected in Mubadala's long-term investment horizon, which focuses on the next 5, 10, or even 20 years.

Looking ahead to the global political landscape, Al Mubarak stated that Mubadala plans to continue investing in China despite potential trade headwinds anticipated under a new Donald Trump administration and the country's economic slowdown. He pointed to the Chinese economy's size, growing middle-income population, and consistent GDP growth as reasons for his confidence in the Asian economic power. Al Mubarak also noted the Chinese government's efforts to boost markets through interest rate cuts and stimulus plans, further supporting his optimism in the country's investment potential.

In conclusion, Mubadala's warnings about the impending disruption of AI serve as a reminder of the transformative power of the technology. As AI continues to evolve at a rapid pace, it is crucial for investors, businesses, and governments to stay informed and adapt to the changing landscape. By investing in AI and the infrastructure that supports it, Mubadala is positioning the UAE as a global leader in the AI revolution, while also acknowledging the risks and challenges that lie ahead.