👋 Good morning, Smashi Business Readers!

Today’s edition delves into the shifting sands of regional wealth, high-stakes tech investments, and bold global expansions:

• 🌍 Billionaire Growth in the UAE: The Emirates solidifies its position as a hub for the ultra-wealthy, with Dubai’s billionaire count rising even as neighboring Saudi Arabia faces a slight decline.

• 🌀 What’s Next for Kingdom Holding’s $2 Billion Investment in X?: With Elon Musk’s rebranded platform facing a steep valuation drop, we explore what this means for Saudi Arabia’s Kingdom Holding and other investors.

• 🏗️ Damac Group’s $3 Billion Push Into Southeast Asian Data Centers: Billionaire Hussain Sajwani’s Damac Group bets big on the AI and cloud boom, targeting Malaysia, Indonesia, and Thailand for its cutting-edge facilities.

Let’s dive into the details.

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🌍 Billionaire Growth in the UAE Amid Regional Shifts in Wealth 💰🏙️

📰 What is it about?

• The UAE witnessed a 7% increase in its billionaire population in 2023, totaling 48 billionaires with a combined wealth of $205 billion.

• Dubai leads with 39 billionaires, solidifying its reputation as a hub for the super-wealthy. High-profile residents include entrepreneurs like Yusuff Ali (Lulu), Hussain Sajwani (Damac), and Pavel Durov (Telegram).

• In contrast, Saudi Arabia's billionaire population declined by 4% to 68, with their collective wealth dropping from $205 billion to $195 billion.

• The findings stem from Wealth-X’s Billionaire Census 2023, highlighting global billionaire trends, including a 4% riseworldwide to 3,323 individuals.

💡 Why it matters?

• The UAE as a Wealth Magnet: Dubai’s growing appeal to billionaires underscores its position as a safe haven with robust infrastructure, economic stability, and investment-friendly policies.

• Regional Economic Divergence: The contrasting trends between the UAE and Saudi Arabia reflect broader economic shifts. The UAE’s growth is supported by diversification efforts, while Saudi Arabia faces challenges like weaker oil prices and high reform costs.

• Global Perceptions: The Middle East continues to attract the ultra-wealthy despite global economic uncertainties, reinforcing its strategic importance in global wealth trends.

• Economic Implications: The UAE’s rising billionaire population aligns with forecasts of 5.1% GDP growth by 2025, compared to Saudi Arabia’s 4.6%, highlighting its edge in attracting and retaining wealth.

🔜 What’s next?

• UAE to Strengthen Wealth Ecosystem: Expect more initiatives from the UAE to attract global high-net-worth individuals (HNWIs) through policies, tax benefits, and luxury real estate projects.

• Saudi Arabia’s Reform Payoff: While facing short-term pressures, Saudi Arabia’s Vision 2030 reforms could attract billionaires in the future as its economy diversifies and matures.

• Energy Price Impact: The trajectory of oil prices will continue to influence wealth distribution in the region, with economic diversification playing a critical role in mitigating risks.

• Global Wealth Strategy: Both nations will likely double down on making their cities more appealing to billionaires, leveraging infrastructure, innovation, and favorable economic policies.

• Middle East as a Billionaire Hub: The region’s safe-haven appeal, bolstered by geopolitical stability and luxury offerings, will further enhance its profile among the world’s ultra-wealthy.

Abu Dhabi Business Week Kicks Off in ADNEC

📰 What is it about?

• The inaugural Abu Dhabi Business Week (ADBW) is a landmark event which kicked off on December 4 and will run till December 6, 2024, at the ADNEC Centre in Abu Dhabi. Under the theme "Deliver Value. Create Impact," the event has brought together 150+ speakers and 8,000 participants, including policymakers, business leaders, investors, and entrepreneurs. Featuring 10 specialized forums, such as the Abu Dhabi Business Forum, Procurement Forum, and Entrepreneurship Summit, ADBW focuses on global investment trends, public-private partnerships, and innovation.

💡 Why it matters?

• ADBW reflects Abu Dhabi’s vision for economic diversification and its commitment to becoming a global business hub. By fostering collaboration between public and private sectors, the event promotes sustainable economic development while creating new opportunities for investment and innovation. The wide-ranging agenda, from entrepreneurship to industrial growth, highlights the Emirate's ambitions to shape the future of key sectors and attract global investors.

🔜 What’s next?

• With two days remaining, participants can still join dynamic forums like the Family Business Forum, Innovation Xchange, and Youth Forum. These sessions will delve deeper into critical topics, including women’s empowerment, youth engagement, and cutting-edge technological innovation.

• The momentum of ADBW offers a unique chance to align with Abu Dhabi’s evolving vision of becoming the ‘Capital of Capital.’ 

• Don't miss the final opportunities to engage, innovate, and collaborate! 🚀For more details and to register, please visit: adbusinessweek.com 

📈 Markets

🌀 What’s Next for Kingdom Holding’s $2 Billion Investment in X?

📰 What is it about?

• Kingdom Holding’s Stake in X: Saudi Arabia's Kingdom Holding invested $2 billion in Elon Musk’s acquisition of Twitter (now X), becoming the second-largest shareholder. The Qatar Investment Authority also contributed $375 million.

• Massive Losses: Since Musk’s 2022 takeover, X has lost 70% of its value, with Fidelity estimating the platform is now worth $15 billion, down from $44 billion. This has led to Kingdom Holding losing $1.4 billion of its investment.

• Platform Challenges: Revenue from X fell 22% year-on-year in 2023, while competitors like Bluesky gain traction, attracting 1 million new users daily.

💡 Why it matters?

• Financial Risk: With limited prospects of a full recovery, Kingdom Holding and other investors face long-term uncertainty in recouping their investment.

• Political Strategy: X’s utility in global politics, especially with Trump potentially using it as a platform for his 2024 campaign, could boost engagement but create tensions with Musk’s other businesses like Truth Social.

• Investor Pivot: Saudi and Qatari backers appear to be leveraging their association with Musk beyond X, as shown by Kingdom Holding’s recent participation in a $6 billion funding round for xAI.

🔜 What’s next?

• Shift Toward Monetization: For X to stabilize, Musk must innovate new revenue streams, such as subscription models or expanded premium features, despite limited progress so far.

• Political Leverage: Trump’s return to X could increase engagement, but the platform risks further alienating advertisers and moderate users. This limits its ability to capitalize fully on such a resurgence.

• Strategic Diversification: Investors like Kingdom Holding may focus on leveraging returns from Musk’s other ventures, such as SpaceX and xAI, to offset losses from X.

• Investor Patience: Given X’s “inevitable decline” according to some analysts, investors may pivot to minimizing further losses and reaping indirect benefits from their proximity to Musk’s portfolio and political connections.

• Bluesky’s Rise: As Bluesky continues its exponential growth, X faces competition for users and reputational challenges, forcing a reevaluation of its long-term role in Musk’s business empire.

💭Quote of the day
“First, think. Second, believe. Third, dream. And finally, dare.” - Walt Disney, Animator and film producer

🏗️ Damac Group’s $3 Billion Push Into Southeast Asian Data Centers

📰 What is it about?

• The Dubai-based conglomerate, led by billionaire Hussain Sajwani, plans to invest $3 billion in building data centers in Malaysia, Indonesia, and Thailand over the next three to five years.

• Edgnex Data Centers: Founded in 2021, this unit of Damac is spearheading the effort, with an additional global expansion budget of $5-7 billion. Projects in Vietnam and the Philippines may follow by 2025.

• AI & Cloud Hub: Facilities will be powered by Nvidia’s Blackwell chips, making them integral for AI and cloud services. A joint venture with Thailand’s Siam AI underscores this focus on cutting-edge technology.

💡 Why it matters?

• Rising AI Demand: As AI becomes critical to industries, digital infrastructure is essential to house powerful servers and advanced chips. Damac’s investment positions it as a key player in Southeast Asia’s AI economy.

• Strategic Diversification: This move highlights Damac’s shift beyond its real estate roots into technology and data-driven sectors, mirroring global trends among major conglomerates.

• Southeast Asia’s Potential: The region is emerging as a prime location for data centers due to its growing tech industry, stable grids, and ample power supply. Thailand, for instance, has secured multi-billion-dollar commitments from Amazon, Google, and Microsoft, signaling confidence in its high-tech future.

🔜 What’s next?

• The first Bangkok data center opens in March 2024, with more facilities in Malaysia and Indonesia in the pipeline.

• Joint ventures, such as with Siam AI, will expand local expertise and ensure facilities are equipped with AI-ready infrastructure.

• Edgnex plans to target Vietnam and the Philippines next, with announcements expected in 2025.

• Addressing Thailand’s shortage of skilled workers will be key. Initiatives like Nvidia's collaboration with Thai authorities on AI education aim to build local talent.

• With over 550 megawatts of projected capacity in Southeast Asia, Edgnex is poised to compete with other global players in the region’s burgeoning $5 billion data center market.

🔍In other news…

1. Apple, HP, and Dell are witnessing a decline in their Gulf market share, not due to political boycotts but because of increasing competition from rivals, according to analysts at IDC.

2. Unicorn hunters reality show set to expand to the gulf in Saudi Arabia and Qatar, boosting investment for startups.

3. Lindt Germany launches ‘Dubai Chocolade,’ inspired by the UAE’s viral FIX Dessert!

4. The Qatar Investment Authority (QIA) has finalized an agreement to acquire a significant minority stake in Audi’s Formula 1 team.

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