Abu Dhabi artificial intelligence company G42 has teamed up with technology giants OpenAI, Oracle and Nvidia to create a major AI hub in the emirate to accelerate local development of the technology.
Witnessed by President Sheikh Mohamed, the companies signed a strategic partnership to set up Stargate UAE, a 1-gigawatt computing cluster that will operate in the newly established 5GW UAE–US AI Campus, the Abu Dhabi Media Office reported.
The 1-gigawatt compute cluster, will also be built in co-operation with Cisco and Japan's SoftBank Group, and will operate in the recently established 5GW UAE–US AI Campus in the emirate, G42 said on Thursday.
Compute relates to the resources needed for AI systems to function, including training models, processing data, and making predictions and giving answers.
The launch of Stargate UAE is a “significant step” in the tech partnership between the UAE and the US, Peng Xiao, group chief executive of G42, said.
“This initiative is about building a bridge … that helps bring the benefits of AI to economies, societies, and people around the world,” he added.
Stargate UAE is the first major milestone in the OpenAI for Countries programme, chief executive Sam Altman said.
He and Nvidia boss Jensen Huang both described the project as a key part of the UAE's “bold vision” of using technology to boost the economy and contribute to the global stage.
Stargate is also the “first-in-the-world platform” that will enable “every UAE government agency and commercial institution to connect their data to the world’s most advanced AI models”, Oracle chairman and chief technology officer Larry Ellison said.
The deal caps a busy week for G42, which has struck major agreements locally and internationally.
At the Make it in the Emirates summit in Abu Dhabi on Wednesday, it announced a partnership with US-based World Wide Technology to help the UAE become an exporter of AI solutions.
On Tuesday, G42 teamed up with France's Mistral AI to develop advanced AI platforms and infrastructure, the second major deal between the UAE and France this week. On Monday, Abu Dhabi AI investment company MGX, AI chip leader Nvidia and French companies teamed up to build the largest AI campus in Europe.
G42 was this month also reported to be embarking on an expansion in the US and, before the arrival of US President Donald Trump to the UAE, the company signed an initial agreement with US technology company Cisco to explore AI infrastructure development across the public and private sectors.
The company is “central to Abu Dhabi's strategy to become a global AI leader, focusing on developing sovereign capabilities and fostering an innovation ecosystem”, Louis Napoletani, chief executive of Mottli, told The National.
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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