President Sheikh Mohamed meets BlackRock, Microsoft and Nvidia executives in US visit

UAE President Sheikh Mohamed on Tuesday held talks with the chief executives of BlackRock, Microsoft and Nvidia to discuss modern technology and artificial intelligence, state news agency Wam reported.

The talks, which focused on technological developments and the growing collaboration between the UAE and the US in the technology sector, came during Sheikh Mohamed's official visit to the US.

He noted the UAE's commitment to investing in AI and advanced technology, and underscored the importance of deepening co-operation with global partners. Sheikh Mohamed also discussed the potential for these advanced technologies to unlock progress and economic opportunity.

The chief executives – Larry Fink of BlackRock, Satya Nadella of Microsoft and Jensen Huang of Nvidia – expressed their interest to continue collaborations with the UAE on advanced technology.

The UAE earlier announced partnerships with companies involved in AI as part of the country's broader effort to position itself as a global centre for the technology.

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US-UAE AI momentum

Last week, Abu Dhabi's AI company G42 announced a partnership with Nvidia to try to improve the accuracy of global weather forecasting. The collaboration will include the establishment of a Climate Tech Lab in Abu Dhabi that will become a centre for research and development, G42 said in a statement.

The partnership builds on Nvidia's Earth-2, an open platform that makes climate and weather predictions with an interactive, AI-augmented and high-resolution simulation.

The Mubadala-backed technology investment company MGX also recently joined forces with Microsoft and BlackRock to raise up to $100 billion to enhance the future of AI.

Meanwhile, Microsoft announced the establishment of a new development centre in Abu Dhabi. The Global Engineering Development Centre will be Microsoft's first in the Arab world, the company said.

It said the centre would build on developments to strengthen the UAE's position as a global tech centre by creating “cutting-edge technologies in the region” and attracting global talent.

“Our Engineering Development Centre in Abu Dhabi will bring new talent to the region and help power innovation that will drive economic growth and job creation for both the UAE and the world,” Mr Nadella said in a statement.

Microsoft announced a $1.5 billion investment in G42 in April, which is expected to help push the Abu Dhabi-based AI company's global expansion plans.

Future plans

Sheikh Mohamed's meetings with Mr Fink, Mr Nadella and Mr Huang come a day after he held talks with President Joe Biden and Vice President Kamala Harris in Washington.

“The leaders charted an ambitious course for the United Arab Emirates and the United States to lead global efforts to develop and expand new fields central to the global economy, particularly in advanced technologies and the clean energy required to power Artificial Intelligence,” Sheikh Mohamed and Mr Biden said in a joint statement.

They also welcomed the Microsoft-G42 partnership.

“These initiatives mark the beginning of our partnership and investments in the responsible deployment of advanced technologies, clean energy and frontier technologies that will be the engine that powers our interconnected world,” their statement said.

Building on the countries' collaboration in the advanced technology sector, the leaders said the partnership includes protection for US and UAE national security and helps established trusted investments and entrepreneurship.

In a separate statement, they signalled their commitment to develop a UAE-US agreement on AI. They also expressed a shared vision to promote safe, secure and trustworthy AI development.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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