Sign in
Carbon transparency, energy, AI, and geopolitical tensions at FII: Day one of the Future Investment Initiative (FII) 2024 kicked off with a carbon transparency agreement, as well as discussions on everything from energy and renewables, to AI and geopolitical tensions.
Who was missing? Prominent figures from Abu Dhabi are not attending this year’s FII, focusing instead on Abu Dhabi Finance Week as the emirate competes with Riyadh to lead the region’s financial sector, according to Bloomberg.
ALSO- It’s the last edition of the forum for FII Institute CEO Richard Attias, who announced he would step down from his role by year-end, according to Arab News.
(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)
DOMESTIC INVESTMENT STRATEGY-
PIF is shifting its strategy towards domestic investments: The Public Investment Fund plans to reduce overseas exposure from 30% to 18-20%, shifting focus to support domestic diversification projects and encourage co-investment from foreign firms within the Kingdom, Reuters reports. The fund is imposing stricter conditions on external managers and encouraging partnerships aligned with national priorities.
REMEMBER: The PIF has sold down big stakes in US equities, including stakes in BlackRock, Carnival, and Live Nation, reducing US-listed holdings to USD 20.6 bn in mid 2024 from USD 35 bn in 2023, according to the Financial Times.
ENERGY + EMISSIONS + SUSTAINABILITY-
Transparency in carbon markets: The Regional Voluntary Carbon Market Company and the National Committee for the Clean Development Mechanism of Saudi Arabia inked an agreement to ensure the carbon markets in the Kingdom are transparent, robust, and credible.
Reducing emissions rather than changing energy sources: Aramco CEO and President Amin Nasser argued that current energy transition strategies neglect the needs of Asia and the global south, which use only one-tenth of the energy of the global north despite higher populations. With coal, oil, and gas consumption at record levels, Nasser emphasized that the focus should be on reducing emissions rather than changing energy sources. Nasser advocated for a multidimensional approach that relies on energy source diversification to optimize cost and environmental impact.
The oil market is “balanced,” Nasser says, with demand expected to average 104.5 mn bbl / d this year and nearly 106 mn bbl / d in 4Q, Reuters reports. Influences from rising interest rates and recent price declines and reduced demand from China have impacted the market but demand-supply fundamentals remain stable. Nasser urged caution against overly pessimistic views on the country’s economic outlook.
ARTIFICIAL INTELLIGENCE-
Artificial SuperIntelligence in a decade? SoftBank CEO Masayoshi Son predicts that we could have artificial superintelligence (ASI) by 2035, requiring hundreds of bns in investment, according to Reuters. By his estimations, ASI will be 10k times smarter than a human brain. Meanwhile, generative AI will need cumulative capex spending of USD 900 tn for data centers and chips.
Where does Saudi stand in the AI scene? Saudi Arabia aims to rank among the top 15 AI nations by 2030. The PIF is negotiating a USD 40 bn AI fund with Andreessen Horowitz, complementing its USD 100 bn tech and semiconductors firm Alat, according to Bloomberg.
REGIONAL GEOPOLITICS-
The geopolitics of it all: Goldman Sachs CEO David Solomon voiced concerns about regional security and growth prospects amid escalating conflict, particularly with Israel, although these conflicts have not yet significantly impacted regional economic activity, Bloomberg reports. Solomon also highlighted potential regulatory risks from the upcoming US presidential elections, which could impact the economic outlook for 2025 and 2026. Still, the Wall Street heavyweight remains confident in the resilience of the U.S. economy despite worries about growth in Europe and China.
