ABU DABI’s growing obsession with artificial intelligence (AI) has just turned. Mubadala, one of the richest investors of the United Arab Emirates on Wednesday that their investment vehicle was giving results with the placement of 2 billion dollars to acquire a minority participation in the Binance cryptocurrency exchange platform. This implies a radical change in the previous MGX approach in AI infrastructure, although in pragmatic geopolitical terms it could be considered a logical decision.
Since its launch last year, MGX, a Mubadala subsidiary, Abu Dhabi’s sovereign investment fund with a value of 330 billion dollars, and chaired by the powerful sheikh Tahnoon Bin Zayed al-Nahyan, seemed to be fully focused on AI. This included investments in SoftBank Group and the AI data center project of 500 billion dollars in OpenAi in the United States, in addition to XAI of Elon Musk.
It is true that MGX’s potential is quite wide, covering investment in semiconductors and applications such as data, life sciences and robotics. Even so, betting on Binance due to what the ABU Dhabi group describes as a “commitment to the progress of the transforming potential of the block chain for digital finances” continues to look like a new direction.
And the case of Binance has an interesting story, since he declared himself guilty in November 2023, and due to failures in the control of money laundering, he received a fine of 4 billion dollars, and its founder, Changpeng Zhao, served a sentence in an American prison.
The part that MGX now supports is an independent entity of the American platform, and Binance has a new executive director who previously served as Executive Director of the ABU DABI Financial Services Regulatory Authority. However, the nature of the investment is unusual. It is done through stable currencies (digital currencies linked to a sovereign currency such as the dollar), and the counterparts refuse to reveal what type of stable currencies were used.
Abu Dabi’s commitment can make sense in itself: Blockchain, the technology behind cryptocurrencies, allows crucial data to boost the AI. But a clearer logic for this decision lies in two types of pragmatism. One is that the United Arab Emirates have been wanting to become a cryptocurrency center ..
In December, the State introduced its first stablecoin supported in Dírhams Emiratíes, AE Coin, approved by its own Central Bank. The Middle East and North Africa region represented 7.5 % of the world’s total volume of cryptocurrency transactions between July 2023 and June 2024, according to Chainysis, and a fifth of the 5,000 Binance employees are based on the United Arab Emirates.
Meanwhile, the strong ties of Abu Dhabi with the US have already guided their strategy. Last year, a negotiated agreement in Washington between MGX, Microsoft and Blackrock sought to raise up to $ 100 billion to invest in artificial intelligence infrastructure.
Under the presidency of Donald Trump, the United States has renewed his enthusiasm for cryptocurrencies, and a civil demand for the stock exchange and values (SEC) against Binance has been suspended. Although it seems strange, Abu Dhabi’s bet is consistent with the times.
With Reuters information.
You may be interested: Pepsico announces the purchase of the Poppi prebiotic soda brand for almost 2,000 million pesos
