Gulf Capital’s Big Bet: Can Sovereign Wealth Buy Influence in a Divided Global Economy?
In 2026, Gulf countries are using their sovereign wealth funds (SWFs) in a new and more active way. Instead of investing only to earn steady returns, these funds are now being used as strategic tools. The goal is to secure access to important technology, energy systems, and critical supply chains at a time when the global economy is becoming more fragmented and politically divided.
This strategy could strengthen the Gulf’s economic and political influence around the world. But it also carries risks. If global politics or economic conditions change suddenly, large investments could lose value or become difficult to exit.
A major shift in how Gulf capital is used
Gulf sovereign wealth funds are now among the largest investors in the world. Together, they manage almost $6 trillion in assets, which is more than 40% of all sovereign wealth globally, according to Global SWF. This amount is expected to grow further, making the Gulf Cooperation Council (GCC) one of the most powerful forces in global finance.
Abu Dhabi’s Mubadala is a clear example of this shift. Last year, it became the world’s most active sovereign investor, putting $29 billion into 52 deals. This was a 67% increase from the year before. The message is clear: Gulf capital is no longer sitting idle—it is being actively deployed.
This growing scale is changing how Gulf funds invest. Instead of spreading money passively across global markets, many are now focusing on control stakes, joint investment platforms, and long-term assets that support national goals. A December report by State Street Investment Management noted that these investments are closely linked to domestic economic priorities.
The International Monetary Fund (IMF) has also observed this trend. It said GCC investments are increasingly going into service industries and fast-growing sectors that can support long-term economic growth, rather than short-term market gains.
However, despite many high-profile deals, Gulf exposure to the most crowded and expensive areas of the global technology sector is not always as high as it appears.
Limited exposure to overheated tech sectors
Tim Callen, a former IMF mission chief to Saudi Arabia, told Forbes Middle East that Saudi Arabia’s Public Investment Fund (PIF) does not have large direct investments in major AI-focused technology companies, which many investors worry may be overvalued.
PIF’s exposure to AI is mostly indirect, mainly through the SoftBank Vision Fund. Its biggest publicly listed holdings include Uber, Lucid, and Electronic Arts. These are technology-related companies, but they are not at the center of concerns about excessive AI spending.
Callen also pointed out that Saudi Arabia’s biggest investment risk is still oil. PIF owns about 16% of Saudi Aramco, meaning oil price changes directly affect the fund. Around 80% of PIF’s assets are invested inside Saudi Arabia. This limits global diversification but also reduces exposure to volatile US tech markets.
Where Gulf money is going in 2026
Global sovereign wealth and public pension funds reached a record $15 trillion in assets in 2025. A large share of this money, including funds from the Gulf, is going into digital infrastructure, data centers, and AI platforms, according to Global SWF.
In 2025 alone, Gulf sovereign funds invested about $132 billion in the United States. Much of this went into technology firms and critical infrastructure seen as vital for future competitiveness. These investments are not just about profit—they are about gaining strategic access.
Gulf funds are also increasingly looking beyond Western economies. A Deloitte report shows that many are shifting toward Asia. Funds are opening offices across the Asia-Pacific region and increasing investments in China, India, and Southeast Asia.
In China, Gulf funds invested around $9.5 billion in the year ending September 2024. Abu Dhabi Investment Authority and Kuwait Investment Authority are now among the top shareholders in several Chinese companies. As Western investors reduce exposure to China, Gulf investors have stepped in, helped by strong political and trade relationships with Beijing.
Africa is another growing focus, especially in mining. The UAE and Saudi Arabia have increased investment in risky extractive projects, either directly or through global mining companies.
At the same time, Gulf funds are expanding into private credit and technology-focused private investments. These areas have seen Western investors pull back because of higher interest rates and tougher financial conditions.
Are fears of overinvestment overstated?
Some analysts worry that sovereign wealth could create oversupply in sectors like data centers and AI infrastructure. But Callen believes this risk may be overstated in Saudi Arabia’s case.
He said Saudi Arabia is not heavily investing in AI infrastructure abroad. Instead, it is trying to attract foreign companies to build AI and data centers inside the kingdom, often by offering strong incentives.
Many of these projects involve major US technology firms. However, if there is a sharp global downturn in the tech sector, companies could delay or cancel these plans.
Strategic risks in a divided world
Sovereign wealth funds often pursue both financial and political goals. While this can support national strategy, it also creates risks. Research from a German think tank warns that political objectives can distort investment decisions and expose funds to regulatory or political challenges in host countries.
Stress tests show that major geopolitical shocks or sharp drops in technology values could significantly reduce portfolio values. However, it remains difficult to estimate how severe these losses might be.
Callen said the main risk for Saudi Arabia still comes from oil prices, and the impact depends on the nature of any geopolitical crisis. A crisis that pushes oil prices higher could strengthen Saudi finances, while a global slowdown that reduces oil demand would hurt.
Governance, transparency, and large investments in assets that are hard to sell remain ongoing challenges. If strategic investments fail to perform as expected, they could limit returns for years.
A high-stakes question
Even with a clear strategy, questions remain. Is putting nearly $6 trillion into technology, infrastructure, and geopolitical influence the best use of Gulf sovereign wealth?
Large, long-term investments may deliver lower returns than more diversified and liquid portfolios. This shows how political goals can sometimes reduce financial performance.
Sensitive technology investments could also face regulatory resistance or political backlash, especially as global competition increases. If geopolitical conditions change, some investments could quickly lose value.
In a fragmented world economy, Gulf sovereign wealth funds are making bold choices. Whether this strategy delivers lasting power—or costly overreach—remains to be seen.
Published: 11th February 2026
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