Abu Dhabi’s Lunate Weighs $1 Billion Push Into MGX’s AI Mega-Fund

Though it is still in the negotiation process with no definite structure worked out, the move would represent one of Lunate's largest single AI-focused capital deployments to date and further reinforce Abu Dhabi's accelerating ambitions in strategic technologies, according to a report by Bloomberg.

The talks come at a time when MGX, set up jointly by G42 and Mubadala Investment Company in 2024, is considering a landmark plan to raise as much as $25 billion of external capital through a new investment vehicle. That fundraising would place MGX among the largest AI-investment structures in the world, rivaling private-sector mega-funds in the United States and Asia. MGX’s early-stage portfolio includes stakes in OpenAI and xAI, as well as partnerships with BlackRock and Microsoft on a $30 billion data-infrastructure program to build next-generation data centers and energy-intensive AI compute environments.

For Abu Dhabi, MGX's trajectory represents more than another technology fund: the company operates under the broader strategic direction of His Highness Sheikh Tahnoon bin Zayed Al Nahyan, UAE's most influential figure in national security and advanced-technology policy, who also oversees other key entities including G42, ADQ, and Chimera Investments. Since its establishment, MGX has become a central instrument in the UAE's push to embed itself into the global AI supply chain, cultivate sovereign AI capabilities, and secure deep partnerships with the world's largest technology companies.

This places Lunate's potential commitment into context. The two-year-old firm has grown rapidly, using its hybrid model of deploying capital as both a limited partner and general partner to expand across alternative assets, credit, private equity, and thematic investment strategies. Publicly available disclosures show that in 2024, Lunate has deployed over $13.5 billion and raised around $17 billion for its flagship funds, with targets set above those totals for its next fund cycle in 2026. Its anchor LPs are ADQ and Chimera Investment, both members of His Highness Sheikh Tahnoon's investment ecosystem, reinforcing the strategic cohesion between Lunate's activity and Abu Dhabi's wider economic vision.

The firm's approach is unique among regional asset managers because of its focus on establishing structured partnerships with global heavyweight institutions. Current relationships span BlackRock, Blackstone, Brookfield, and CVC Capital Partners, among others. These partnerships have allowed Lunate to integrate global investment processes into Abu Dhabi's capital-deployment strategy while giving foreign institutions deeper access to Gulf investment flows. An expansion into MGX would continue that pattern, linking institutional asset-management practices with frontier AI development.

If Lunate completes the commitment, it would mark another significant capital consolidation around the MGX mission. The group's planned fundraising round seeks to expand its investor base from state-linked institutions alone to include global pension funds, sovereign investors, and strategic corporates looking for exposure to AI-infrastructure plays.

That reflects a growing international trend: institutional investors in the advanced economies have started to expand allocations to AI-compute, semiconductor supply chains, and neural-network infrastructure as part of long-term technology-risk hedging. MGX's investor pitch focuses on acquiring and building assets that support large-scale AI model training, data-processing capacity, and energy-intensive systems required for next-generation AI workloads.

Neither Lunate nor MGX has remarked publicly on the talks, but a deal between the two would be in line with prior activity. Lunate has already joined an investment round alongside OpenAI, putting it in the worldwide cohort of capital providers supporting leading model developers. MGX, for its part, has emerged as a core platform connecting Abu Dhabi's homegrown AI ecosystem to top international AI firms, cloud providers, and infrastructure partners. A $1 billion commitment would bolster MGX's balance sheet, better position the company to make early-stage and growth-stage investments and speed up its capital-raising roadmap.

Industry analysts said the timing coincides with both global and regional factors. The surge in AI-infrastructure requirements, together with the UAE's clear national strategy for AI leadership, has opened a window for Abu Dhabi to consolidate influence by anchoring some of the world's most consequential AI projects. At the same time, institutional investors worldwide are reassessing allocations in response to geopolitical competition over AI hardware access, data-center energy capacity, and model-development sovereignty. In that environment, a well-capitalized Abu Dhabi platform backed by MGX could become a pivotal node for the global AI economy.

Negotiations are still in progress, and the eventual size and structure of Lunate’s involvement in MGX’s capital-raising effort remain to be settled. But the broader strategic alignment between the two organizations-both operating within Sheikh Tahnoon's technology and investment ecosystem-points to ambitions that extend well beyond routine deal-making. A completed agreement would reinforce Abu Dhabi's emergence as a major state-level backer of AI infrastructure and advanced compute capabilities.