Good Morning Smashi Business Readers!

Today’s top headlines spotlight major developments shaping the region’s economic landscape. Abu Dhabi’s Mubadala Investment Company has surpassed Saudi Arabia’s PIF as the world’s most active sovereign wealth fund, driving global investments. Meanwhile, Saudi Arabia’s Neom faces challenges as its air taxi partner Volocopter files for insolvency, casting doubt on ambitious urban mobility plans. In the UAE, Adnoc is set to inject $54 billion into the local economy over the next five years, fostering job creation and industrial growth through its in-country value programme.

Read on for insights on these transformative moves across the MENA region.

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Mubadala Overtakes PIF as World's Top Wealth Fund Spender

📰 What is it about?

• Abu Dhabi’s Mubadala Investment Company surpassed Saudi Arabia’s Public Investment Fund (PIF) as the world’s most active sovereign wealth fund in 2024.

• Mubadala spent $29.2 billion in 2024, up from $17.5 billion in 2023.

• Saudi Arabia’s PIF reduced its spending by 37%, dropping to $19.9 billion from $31.6 billion in 2023.

• The Gulf region's sovereign wealth funds, including those from Abu Dhabi, Qatar, and Saudi Arabia, invested a record $82 billion in 2024.

💡 Why it matters?

• Global Impact: Sovereign wealth funds collectively managed $13 trillion in 2024, with $136.1 billion invested globally.

• Shift in Strategy: Mubadala’s aggressive spending indicates Abu Dhabi's growing ambitions, while PIF's reduced spending reflects a focus on domestic priorities.

• Tech Leadership: Investments in AI, digital infrastructure, and space ($27.7 billion) highlight the Gulf’s drive to lead in emerging tech sectors.

• Economic Diversification: Mubadala’s focus on high-tech investments aligns with long-term plans to reduce reliance on oil revenues.

🔜 What’s next?

• AI Leadership: Abu Dhabi, with firms like G42 and MGX, is doubling down on artificial intelligence to gain global influence.

• Increased Competition: Gulf nations, including Saudi Arabia and Qatar, are vying to position themselves as international tech hubs.

• Future Investments: Sovereign wealth funds may further diversify portfolios, especially in infrastructure, technology, and credit markets.

• Global Trends: Watch for rising deal activity and larger average deal sizes, as seen with 2024’s record $370 million average deal size.

Markets

Neom's Air Taxi Partner Volocopter Files for Insolvency

📰 What is it about?

• Volocopter Insolvency: German air taxi developer Volocopter has filed for insolvency, citing difficulties securing fresh funding.

• Neom Partnership: Backed by Saudi Arabia’s $500 billion Neom giga-project, Volocopter was set to power urban air mobility across Neom’s flagship developments like The Line, Oxagon, and Trojena.

• High-Profile Investors: Volocopter is supported by major players like Mercedes-Benz, Intel, and Mitsui Sumitomo Insurance Group.

• Future Plans: Despite insolvency, the company is working on a restructuring plan and aims to launch its VoloCity eVTOL craft by 2025.

💡 Why it matters?

• Impact on Neom’s Vision: Neom’s ambitious zero-emissions transport system is closely tied to Volocopter’s eVTOL technology. The insolvency creates uncertainty for these plans.

• eVTOL Industry Challenges: The insolvency highlights the high costs, regulatory hurdles, and tough funding environment in the advanced air mobility sector.

• Gulf Competition: Other Gulf cities like Dubai and Abu Dhabi are pushing ahead with their own air taxi initiatives, intensifying regional competition.

• Market Potential: The global flying car market is expected to grow significantly, reaching $921 million by 2030, showing the sector's long-term promise despite current setbacks

🔜 What’s next?

• Restructuring: Volocopter plans to finalise its restructuring by February 2025 while seeking new investors.

• Neom’s Contingency: Neom may need to explore alternative air taxi providers if Volocopter’s financial issues persist.

• Industry Watch: Competitors like Joby Aviation and Archer Aviation are also advancing, with Gulf nations remaining key markets for eVTOL adoption.

• Technology Progress: Despite challenges, Volocopter's progress in certification and test flights could help it maintain relevance in the industry.

What is an eVTOL?

• An eVTOL (electric vertical take-off and landing aircraft) is a battery-powered air vehicle designed for short-distance travel, often used as urban air taxis.

• Volocopter’s eVTOLs are integral to Neom’s renewable energy-powered, multimodal mobility system.

Adnoc to Boost UAE Economy with $54 Billion Investment Plan

📰 What is it about?

• Massive Investment: Adnoc plans to inject AED200 billion ($54 billion) into the UAE economy over the next five years via its "in-country value programme."

• Local Focus: The programme ensures Adnoc’s spending remains within the UAE, benefiting local suppliers, businesses, and workers.

• Key Achievements in 2024:

  • AED55 billion invested in the UAE economy.

  • 5,500 private-sector jobs created for UAE nationals in collaboration with the Emirati Talent Competitiveness Council.

  • 16 new manufacturing facilities established in the UAE.

💡 Why it matters?

• Economic Growth: The initiative has delivered AED242 billion in value to the UAE economy since 2018, supporting local industries and reducing reliance on foreign goods and services.

• Job Creation: Over 17,000 Emiratis have been employed in the private sector since the programme’s launch, fostering Emiratisation and boosting national talent development.

• Industrial Development: The programme strengthens the UAE’s oil and gas supply chain by prioritising local capabilities and infrastructure.

• Private Sector Opportunities: Contracts worth AED720 million and agreements with local suppliers during Global Food Week demonstrate Adnoc's commitment to empowering local businesses.

🔜 What’s next?

• Sustained Investments: Adnoc aims to continue investing in UAE-based facilities, suppliers, and private-sector job creation over the next five years.

• Emiratisation Focus: The initiative will prioritize creating more private-sector opportunities for UAE nationals.

• Supply Chain Expansion: Developing critical supply-chain functions within the UAE to achieve self-reliance in the oil and gas industry.

• Increased Collaborations: Partnerships with local businesses and suppliers will remain a cornerstone of the programme.

In-Country Value Programme Highlights

• Launched in 2018 to maximize value from the UAE's oil and gas resources.

• Focused on keeping oil revenues within the UAE by prioritizing local goods, services, and talent.

• Strengthens the private sector’s role in the country’s industrial and economic growth

🔍In other news…

1. Emirati billionaire Hussain Sajwani, the founder of DAMAC Properties and chairman of DAMAC Group, joined tech mogul Elon Musk and former U.S. President Donald J. Trump at an exclusive New Year’s Eve celebration at Mar-a-Lago.

2. Tech billionaire Elon Musk has set the internet abuzz after changing his name on the social media platform X to "Kekius Maximus”.

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