As Gulf capital reshapes itself in the age of AI, the real story, says Fahad AlSharekh, is not about building the next Silicon Valley in Riyadh or Dubai — but about deploying capital where it wins globally. In this candid conversation with TRENDS, AlSharekh — General Partner at JEDI Fund and Vice Chairman of Kamco Invest — draws a sharp distinction between institutional ambition and retail caution, between mirage ecosystems and real scale. He argues that while sovereign wealth funds are writing billion-dollar cheques into companies such as OpenAI and backing global technology infrastructure, regional venture capital remains shallow, exits elusive, and family offices largely anchored in traditional assets. The GCC’s competitive advantage, he contends, lies not in startup mimicry but in world-class investment power — owning stakes in AI models, energy, data centers, and global category leaders. The future, he suggests, belongs to those who invest early, think globally, and build what the world will need five years from now — not what feels fashionable today.
Where capital is moving and where it isn’t? How has capital flow changed across the GCC in the last year, particularly from a VC and risk-appetite perspective?
There are different types of capital: institutional and retail. Institutional capital includes sovereign wealth funds, banks, corporates, and pension funds. Retail capital in this region is mostly family offices.
Historically, the appetite here has been for public equities, securities, and liquid strategies. For alternatives, people prefer income-generating real estate and REITs. That behavior hasn’t changed much on the retail side.
What has changed is institutional capital. Over the past decade, and especially since COVID, sovereign wealth funds have moved meaningfully into technology. Kuwait Investment Authority has been investing in tech for decades, which is why it owns stakes in companies like Apple and Google. More recently, we’ve seen large investments from the UAE, Qatar, and Kuwait into AI models such as OpenAI, xAI, and Anthropic, as well as into AI infrastructure like data centers, energy, and communications architecture.
Abu Dhabi is leading, but others are also active. The retail hasn’t changed much; they’re always the last ones to the party, usually at peak valuation or IPO. Venture and growth equity make money by going early. Once everything feels “safe,” the growth is already gone. So venture capital or gross private equity are the same; it makes money the earlier you go, the higher the returns, and of course, the higher the risk. But the higher the risk, the higher the reward. Some investors are happy with a 7-8% annual returns, and that won’t change.
What signals make a startup fundable today? How do you assess market opportunity versus real value?
For us, a startup must address a need that will become a habit in five to ten years. That’s the core filter. When OpenAI said it would build a large language model toward AGI, we didn’t try to predict the winner. We looked at the ecosystem around it, the “picks and shovels”: data analysis, data infrastructure, data synthesis. You don’t know which company will win, so you write multiple seed checks. The winner follows a power-law outcome.
A strong portfolio isn’t 10% winners and 90% failures. You want roughly 30% strong winners, 30% modest exits, and the rest can be zeros. That’s where experienced managers differentiate themselves.
In this region, the challenge is predicting what people will need in five years that isn’t already being built by better talent abroad. Copying gig-economy models can work, but once you move into real technology and deep tech, the gaps become obvious: lack of computer science education and AI schools, limited AI research, data analysis schools and data science and very few exits.
Exits remain a challenge. Do you see that gap narrowing?
There are no public markets here that allow a public listing of non-profitable companies. Dubai tried with Nasdaq Dubai. It went nowhere. Saudi’s Nomu exists, but listings there left a bad taste for investors.
Compare that to the US, where Amazon ran negative profits for over 20 years before becoming a $4-trillion-dollar company. That imagination, patience, regulatory and cultural frameworks don’t exist here. As a result, exits don’t exist either.
The smarter strategy is to partner with global companies as they scale into the region. They will list in their home markets. Locally, they need partners for logistics, financing, infrastructure, and operations. Trying to mimic them with regional unqualified talent just burns capital.
Institutional investors are already doing this. Mubadala’s investment in GlobalFoundries is a proven example of regionally managed capital succeeding at a global scale.
For a sustainable ecosystem, does the region need external know-how paired with local capital and structures?
Local markets are small. Saudi Arabia is smaller than California or Texas. If you can’t go global, scale is limited.
But this region is extremely attractive for international companies that want to scale globally from here because we have everything that they require: stability, safety, world-class connectivity, advanced AI infrastructure and an international workforce. Europe and parts of the US are struggling with regulation, social instability, no taxes, and a welcoming culture. Here, people can work, think, and build.
That’s the opportunity: attracting global companies to scale from here, not building local startups for small domestic markets.
Are family offices evolving into co-investors with VCs or fund builders?
The numbers tell the story. Regional VC went from roughly $1 billion to $3 billion. That sounds big, but $3 billion is a single check written into OpenAI by a sovereign fund. That’s the whole industry. You can chase the mirage as much as you want, but it’s a mirage. If the mirage is three times its size, it’s still a mirage. It’s not a notion. Family offices definitely are not doing venture capital.
There is no real ecosystem. You don’t see depth across seed funds, Series A, Series B, and growth. There should be ten funds at every stage. There aren’t. Family offices prefer public equities and dividends, and building revenue-generating malls. \
Which sectors are best positioned for family growth capital?
Infrastructure, energy, and communications are the region’s natural strengths. Family offices, on the other hand, tend to focus on retail, malls, and franchising.
So what would it take for the region to produce not just venture-backed startups, but venture-backed global category leaders?
Sovereign funds are already in the game. Mubadala’s investment in GlobalFoundries is a prime example: early capital in a globally competitive asset, managed regionally. KIA’s early stake in OpenAI is another. Owning stakes in AI models, data centers, and the energy powering them is exactly our AI strategy.
There is nothing wrong with being a world-class investor. In fact, that may be the region’s greatest advantage.
Fast-forward to 2030. What does the ecosystem look like?
Family offices that invest with strong managers are positioned to realize significant returns, especially with the current hype around AI, where some winners will be “big-time winners.” Those investing in mimics, knock-offs, and local me-too models are likely to fail. Government initiatives encouraging economic diversification are helpful, but building a true startup ecosystem akin to Silicon Valley is challenging, the U.S., Europe, and Singapore still struggle to replicate it.
Local startups often lack either technological superiority or network effects. For example, Flowered, a regional success, has network effects, but its seasonal revenues and limited scale make it a less compelling investment compared with global opportunities like OpenAI. GCC markets are fragmented, and only companies like Careem, backed by Uber, operate region-wide. Investors need to focus on where the real money is rather than following hype.
Make sure you are building something everyone needs in five years, not now. If you are building something because it is cool today, you are already late.
Look at the biggest business abroad that is not here. Build something they will acquire, like Talabat or Carat. That is a good model. But build something local so strong and powerful that big companies, when they come, will buy you, whether it is a good acquisition, like Talabat, or a poor acquisition with zero gains, like Souq.com.
People should focus on investments. That is the better way to capitalize on opportunities rather than mimic something that might fail due to lack of talent, mentorship, or economies of scale. The best approach is to copy successful models like Mubadala and GlobalFoundries, KIA and OpenAI, or HUMAIN and MGX, building great data centers.
Smart investors here are those invested in companies, big families in Saudi and Kuwait, LPs in major funds such as Carlyle. That is how it should be done.
