Abu Dhabi’s Mubadala Surges to $327B on AI and Tech Investment Boom

The fund’s performance underscores a broader shift in sovereign wealth fund strategy across the Gulf, as oil-rich nations look to diversify their portfolios and future-proof their economies against commodity volatility.

Mubadala is now the second-largest sovereign wealth fund in Abu Dhabi, behind the Abu Dhabi Investment Authority (ADIA). Alongside the smaller but rapidly growing ADQ (Abu Dhabi Developmental Holding Company), these three institutions collectively manage more than $1.7 trillion in assets—positioning the emirate as one of the most powerful financial players globally.

While ADIA remains more conservative in its allocation strategy, Mubadala has carved a niche as the region’s innovation-focused investor, targeting fast-growing sectors like semiconductors, renewable energy, biotechnology, and most notably, artificial intelligence.

Mubadala’s 2024 performance was heavily bolstered by its growing exposure to next-generation technologies. A cornerstone of this shift was the launch of MGX, an AI-focused investment company co-founded with G42, the UAE’s leading AI firm. MGX has already made major waves by backing high-profile ventures including OpenAI—creator of ChatGPT—and Elon Musk’s xAI, as well as other foundational AI infrastructure platforms.

The creation of MGX marks a milestone in the UAE’s broader national strategy to become a global hub for artificial intelligence by 2031. Mubadala’s leadership in this space reflects Abu Dhabi’s growing alignment with U.S.-based innovation hubs and Silicon Valley venture ecosystems.

Khaldoon Khalifa Al Mubarak, Managing Director and Group CEO of Mubadala, emphasized that the fund’s strong performance was driven by strategic investments in sectors critical to global growth and innovation. He noted that Mubadala is positioning itself as a forward-looking global investor by focusing on long-term solutions that support human progress.

Mubadala’s strategic repositioning is also evident in its asset allocation. As of 2024, 40% of its portfolio is now allocated to private equity, up from 38% the year before, while public market exposure dropped to 23%, down from 25%. The move reflects a growing preference among institutional investors for less volatile, long-duration assets that can offer both upside and stability.

Private credit is another area where Mubadala is ramping up. With $20 billion now allocated to the sector, the fund has partnered with financial giants such as Apollo Global Management, Goldman Sachs, and Carlyle Group to expand its reach into high-yield corporate lending and structured finance.

This mirrors a larger trend across sovereign funds globally, with investors seeking alternatives to low-yield government bonds and overvalued equities. In Mubadala’s case, these investments not only offer returns, they also secure strategic footholds in critical industries.

Beyond AI and tech, Mubadala continues to maintain a diversified investment mandate. In 2024, it helped launch Space 42, a new satellite company formed through the merger of UAE-based Yahsat and Bayanat, reflecting the UAE’s growing ambitions in space technology and geospatial intelligence.

In real estate, Mubadala increased its exposure through co-investments with Aldar Properties, and in healthcare, the fund maintained strong positions in diagnostics, biopharma, and medical technology.

Cumulatively, Mubadala deployed AED 119 billion ($32.4 billion) in capital during the year, a 34% increase from 2023. Over the past five years, the fund has delivered an annualized return of 10.1%, according to its latest financial disclosures.

Mubadala’s evolution is closely aligned with the UAE’s national development goals. As part of “Abu Dhabi Vision 2030” and “We the UAE 2031,” the country is investing heavily in non-oil sectors, from renewable energy and fintech to tourism and education.

By focusing on value creation in frontier markets and advanced technologies, Mubadala is playing a dual role: acting as both a global investor and a strategic arm for national transformation.

Mubadala’s model may serve as a template for other sovereign wealth funds in the Middle East, particularly as geopolitical dynamics, climate policy, and technological shifts reshape global investment flows. With strong returns, rising global influence, and a high-risk tolerance for innovation, Mubadala is positioning itself as one of the most forward-looking state investors in the world.

As AI, quantum computing, and biotechnology become pillars of the global economy, Mubadala’s early bets could define its next decade of growth and further embed the UAE as a central node in the future of global capital.