His Excellency Khaldoon Al Mubarak: Investing in an AI-Driven World

0:00When I talk to my team, I'm like, last 10 years were the good old days. Now, in the age of AI, I can't talk 10 years. Yeah, and now I talk three years. The next three to five years, it's going to be tough. But I see that all in opportunity. That's His Excellency Khaldoon Al Mubarak, CEO of Mubadala, one of the world's most influential sovereign wealth funds. And it's a long-term investor in technologies around the world. Together we talk about why long-term capital sometimes sees the world differently. It has less quarter-to-quarter pressure, and its patience matters more today than ever before.

0:41We explore how Mubadal's home country, the UAE, has some interesting lessons for us all. Resilience gained over generations, from the collapse of the pearl trade to mastering oil and gas, to preparing for the world's next technological shift. My conversation with Khaldun al-Mubarak, coming up next on Tools and Weapons. Khaldun, thank you for joining me. Here we are in Davos, World Economic Forum 2026. Thank you so much, Brad. I really appreciate the opportunity. You know, beyond our professional relationship, we have our friendship. And Davos is always a very interesting starting point for the year.

1:21you get a good sense being here on the geopolitics, on the macroeconomy. I find it to be very efficient. You lead one of what I think is one of the world's most amazing investment institutions, Mubadala. Tell us about it because not everybody knows about it. Mubadala is a sovereign fund owned by the government of Abu Dhabi. I had the, I'd say the privilege, I'm really honored to have been part of the startup team that started this sovereign fund from the beginning. almost 20 years ago. The UAE is an energy-producing nation, like Singapore, like Norway, like many of these energy-producing countries, the UAE has sovereign funds and historic sovereign funds.

2:03Adia, in our case, the Abu Lhabi Investment Authority, is the biggest one and actually one of the pioneers. So when I started with Mubadar, I was just, you know, I think one investment and almost a startup. And now, over these years, we've grown to be now over We're almost$380 billion of assets under management. And we're very proud of what we've accomplished there. People sometimes look at funds like yours and they say you can provide patient capital. What does that mean? And how do you think about your philosophy for the investment strategy you pursue? Yeah, I think some people call it patient.

2:41Some people call it long term. When we invest, I have something you don't have, which is I don't have to deal with that quarter to quarter pressure. It's a different type of pressure. I think we probably share the same pressure because your shareholders and my shareholder have similar expectations in terms of returns, in terms of performance. But the difference is, is in that Q to Q pressure. pressure. In my case, I get judged on performance over three years, five years, 10 years. And therefore, our decision-making in both investments, deployments, and monetizations takes a different lens. And you know that when you're under the pressure to deliver that quarter or that half or at that end of the year is different when you're taking a long-term trajectory in terms of your decision-making, but allows, I think, an advantage in my view in the decision-making because you have a bit more room to be patient in decisions sometimes that if you take that patient approach, there's a better outcome.

3:52If you think back a decade ago, and now fast forward back to the moment we're in, what is most different in terms of the way you look at the world, what you, I should say, see in the world in terms of investment opportunities and investment challenges? It's harder today, much harder. And it's easy to say that today, but I think generating that return that we all work for, it's a lot harder right now. The world has evolved, I think, quite dramatically over these last 10 years. Technology has come in in a way that's, I think revolutionized everything. It's a tumultuous time, really. Yeah. I think we've had a great run over these last 10 years.

4:40We're probably one of the highest performing sovereign funds in terms of returns. But when I talk to my team, I'm like, last 10 years were the good old days. Now, in the age of AI, I can't talk 10 years. Yeah. And now I talk three years. And maybe five. So the next three to five years, it's going to be tough. It's going to be exciting, but we have a long, long challenging road ahead that I personally am very excited about, but I know the magnitude of the challenge. And generating these sort of very strong returns as we've done over the last 10 years is more difficult going forward.

5:26Let's talk a little bit about AI. And let's actually start with the fact that you are based and you live in the country that the Microsoft AI Diffusion Report puts as number one. The world leader when it comes to adoption and use of AI. In fact, our most recent report said that the UAE ended 2025 with 64 % of the population using AI. That's number one. Singapore is number two with 60. Then you start to fall dramatically when you look at other countries. It also continues to grow at a rapid rate. Why do you think that people there are embracing it so expansively? Well, I think it's because it's embraced across the board.

6:12You've been to Abu Dhabi many times, Brad. You know that very, very well. Let's start on the government side. government in the UAE, when it comes to AI enablement, when it comes to understanding of AI and the embracing of AI, I think probably comes top of the stack in terms of governments around the world. So our government to start with is, I think, gets it, gets it and is very forward-leaning on that. You then move into business, corporations, institutions, when it comes to understanding the benefits of that technology, the potential of that technology, and the willingness as businesses, as corporations, as institutions to actually jump into that pool.

6:57Again, I think I would say a very high grade I'd give to our business community. And then the fact that society has really embraced it, number one in the world on a per capita basis in terms of AI usage. It's spread across society, business, economy, government. That's, I think, a very unique, I'll give it an edge that the UAE have in that sense. And it really starts from the top, all the way from the top, and it goes throughout society. I think AI adoption requires that people have trust in how it's being developed, how it's being used. And one of the most amazing things I find when I'm in Abu Dhabi, for example, is the feedback loop.

7:42Citizens can report things using AI tools to the government. It may be a pothole in the street. It may be some other issue. And then there's a feedback loop. They get information back. And I think that's a little bit even rooted in the traditional culture of Abu Dhabi. Can you say a little bit about that? Yeah, of course. I mean, this is actually one of the coolest things we have, I think, in the UAE and in Abu Lhabi specifically. We have our app, which is essentially every citizen has on their phone an AI agent, a government agent, that basically covers over, at the moment, over 1 ,100 services, going to about 1 ,300, I think, in the next couple of months.

8:25In one platform today, any citizen can cover everything from paying their traffic fines, their healthcare profile, school of their kids, licenses for businesses they have, any municipal services, renewals of any forms of licenses, from driving license to anything, right now at the tip of their finger. And it's incredible. So that part to go from the traditional government service, the good old days, and the bureaucracy of that, to now seconds in your hands. Citizens in the UAE are benefiting from this beautiful technology. So let's say, God forbid, you have an emergency. It's 11 o 'clock at night.

9:10You slip, you know, break a leg, and you need to go to the emergency. In the normal course of life, your wife or whoever is with you will put you in a car, take you to the closest emergency. Now, it's different. You take a picture of your injury. So you plug in. You're able to know at the moment what's the closest, not just the closest emergency facility around, but where actually there's, let's say, the shortest line, where it's going to be quicker to get in. So you might be, you know, maybe the closest hospital is a mile away, but actually the one that has a faster service is maybe two miles away.

9:51So you're better off going to the other one rather than going. So that's like the easiest thing. Next thing you know, it'll tell you, well, you know, in that particular facility at this moment, there is a orthopedic specialist that specializes in that. So rather than go to that hospital, go to this hospital. They're on call right now. Go there right now. And then it plugs in. And on your way, it's already informed the hospital, informed the doctor. They're expecting you. That's all happening in real time. That is incredible. Yeah. It's already in your hand, at your disposal. I was at a gathering the other day and there was a, you know, older man.

10:26He was, he's like 92 years old. I've known him a couple of my life. I don't think he has a, I don't think he, he definitely doesn't have a college degree. And I'm not so sure if he had even a primary school education. He was, he talked to me about something and then he pulls out his phone and he's using the app. So now you're seeing a 92-year-old man that doesn't have any education that is now embracing AI at that age and being able to use that in a very proficient way. And that's why the society has embraced it because it's services that they were used to doing it in one way. And now they're doing it another way and they're seeing the benefits of it in a very clear and tangible way.

11:13The same service, TAM, that runs this does have some physical locations, some offices that people can go to if they need technical help with the app. Yeah. People in the process of getting help with something learn how to use it. It's how you take an entire population on a journey into the future, if you will, and adapt to what people need rather than just tell people to adapt to what the technology offers. At the beginning, we anticipated this was going to be a much longer transition, but people adjust very, very fast. One of the interesting things, as I think about AI, is there are many great technologies, but not that many that require enormous investments in infrastructure.

12:02Canals actually did. They were like the first, and then it was railroads, electricity, the telephone, highways, airports. So here we are, this infrastructure stage. How does the thinking that goes into investments in infrastructure differ, for example, from other kinds of technologies you may have invested in or might think about investing in over time? So about 100 years ago, our industry that fueled our economy was basically the pearl diving industry. And it was not, let's say, the most economically attractive industry, but it did okay and our economy was okay. And then we had a first technological disruption, the invention of the artificial pearl.

12:52When the Japanese came up with that, that economy crashed. So we suffered the consequence of a technological disruption by not being diverse or not being ready for what's next. And we were lucky to have another great natural resource, which was oil and gas. And then became another journey of turning that country and that economy into an oil and gas economy. But learning from the lesson of that first disruption, which is from day one, even as oil and gas reaped the revenue benefits and developed the economy, there was always a diversification strategy from day one. Hence, over the years, even though the flows of that natural resource raised significant revenue for the country, we went from probably an 80-20 GDP, 80 % energy, 20 % all the rest, to flip it.

13:46Mm-hmm. in a span of 30 years. But that industry, essentially, we perfected, which is the business of extracting the oil and gas, refining it, producing barrels of oil, chemicals, and then exporting that. That was our business. Now, when we look at this new technology, the way we think about it is, all right, renewables are going to change the way we think of energy. And rather than fight against the inevitable reality that renewables are real, be it solar, be it wind, be it nuclear, be it fusion, whatever it's coming, it's going to come and it's going to disrupt this natural resource. We took the view, now we're going to embrace it and we're going to invest in it.

14:35And we're going to invest in it here in the UAE and we're going to invest in it globally and we're going to be actually major players in the energy business. And that energy business used to be conventional, and now it's all of the above, and we're going to be all of the above, and we're going to be very good at that. But then the next iteration of that is, all right, how do we get into this next disruption, which is technology? Now, AI, you know better than me, the fuel of AI is energy. Sure. So now, how do we intersect as a country and say, all right, we take our strengths. What are our strengths?

15:12We are able to produce energy from wind to solar to nuclear to conventional gas at a very competitive price, at scale, and execute on these projects. That's what we do. We can do that. We have efficient capital that can come in and be deployed in that space. And we get that business. Because in effect, we're now using energy to produce this new barrel, but it's not oil. It's actually intelligence. And it's tokenization. And that's our next transition. And in the same vein as renewables, we want to be in that business, not just in the UAE. We can be good at that at the UAE, but we want to be that in that business all over the world.

16:03with the right partners and long answer to your question yeah but that's what we do and that's our investment strategy and that's what we've been doing over these last couple years and that's how i see at least in the next three to five years what will be a focus uh of our investment strategy

16:29right now a lot of people are looking at all of this and they're asking you know in effect will supply and demand be in sync in other words is there a bubble will we end up with a point where we just had too much supply and not enough demand and what will that mean as such an important investor how do you think about that i don't personally buy into the the bubble argument. I think it's supply and demand at the moment. And I think at the moment, the demand significantly exceeds the supply. So I think there is a significant catch-up that needs to happen. At some point, there could be a bubble and there could be an oversupply, but I think we're nowhere near that.

17:16At least my line of sight today until 2030, even 2035, the demand is so strong and the supply is so scarce. The demand is only growing. It is only growing. Now, of course, when you say bubble, bubble in what? Are we talking bubble in data center capacity? Are we talking bubble in compute, in GPUs? Are we talking bubble in the valuations of some of these companies? You know, the answer is different depending on which slice of that you're going to be looking at. So break it down for us. Take a few of those that really stand out as most important and share how you're analyzing those that really jump out.

18:00On data center, GPUs, chips, obviously, energy, I think the supply to demand situation is clear to me. We are in a shortage across the board. And I think the trajectory for that will continue to be behind the curve for the foreseeable future, all of that, and continues to be investable. That whole stack for me is pretty clear. When it comes to the valuations of these companies that are producing these models, all right, that's a bit of a question mark. And that one, I'll stay on the fence. Mm-hmm. When it comes to the valuations of the hyperscalers, your company and others, I think these companies will grow.

18:53I remain, I think, pretty bullish on that. They are so dominant in their spaces, and I can only see them growing. One of the things that I think is so fascinating about where you sit is not just where you sit in the global economy, but in the world's geography. You want to fly to India. It's a lot shorter than coming from the United States. You can fly to Europe. You can fly to Africa. all of Abu Dhabi and the UAE is in a position to serve as a bit of a bridge to different parts of the world. I think our location in the UAE is interesting in the sense that while we're a small country with a relatively small population, we don't think of it that way.

19:42We think of the market around us. And when you draw that, you know, that radius from Southeast Asia, of course, India, the Middle East, Africa, just that circle, that's over two and a half billion. That's the market that from a UAE perspective we look at. And that's what we'd like to, across all industries, try to obviously address. And I think the UAE is very well positioned from an infrastructure perspective, from a connectivity perspective, to really access all these markets from India, Southeast Asia, Africa, the Middle East, et cetera? Let me ask you about Africa, because obviously it's a continent that still is waiting for the arrival of electricity for about 40 % of the population.

20:31And it's also a place where I think AI holds so much promise. It's a part of the world that has the world's youngest population, fastest growing population. When you look at economic flows, investment opportunities, technological needs, just even the social mission that I think often you play as an investor, how do you look at Africa today? In a world where most countries are facing declining populations, where you're seeing the major growth in the populations for the next 50 to 100 years, It's mainly Africa. So one has to really take Africa seriously. And Africa has tremendous demands. You know, whatever we're going to talk about, there's a shortage of countries.

21:24People have always taken advantage of Africa. One has to take a patient and long-term view when one looks at Africa. You have to really serve Africa. Now, of course, in business and economics, it has to be sustainable. It has to be viable, but it also has to be beneficial for the people. And it has to take a long-term view. I think in Africa, there is no such thing as transactional. If you approach Africa with a transactional view, you will fail. I have a strong view on that. You have to take a long-term view and you have to really invest in the people and invest in the relationship. And I think that's where I think our experience has been in Africa has been whenever we've been able to build relationships, invest in the country, build infrastructure, take a long-term view, I found that to be the best win-win-win situation.

22:17And when you look at East and West, which covers a lot of territory these days, and you need to balance that as well, how do you deal with that dynamic? It's like the Middle East. People tend to take a very simplistic view when they look at the Middle East. while they all speak the same language. We're different. Every country is different. The people are different. They might speak the same language. They might have the same religion in some cases, but they're different. And same thing with Africa. East, West, as a rule of thumb, each country has to be taken on its own merit and one has to take the time to understand that country, that people, and that DNA.

23:04And if you do that, I think you have a much better chance of success in Africa. We made it halfway through the 2020s. We're also starting the second quarter of the 21st century, which I think is an interesting milestone. Are you optimistic, pessimistic, both, neither? How do you think about your perspective on the future? De facto, I'm always going to be optimistic. I'm a glass half full, always. And I think on this one, it's not just because I am an optimist. I actually believe wholeheartedly that tomorrow is going to be better than yesterday. And next year is going to be better than last year.

23:42And the next 10 years will be better than the last 10 years. So I feel good about where the world is going. Of course, there's a lot of problems. Of course, there's a lot of challenges. But I see that all in opportunity. And I think particularly when it comes to technology and AI and what that brings to life. Yes, there are risks and things that we have to be very conscientious about and very careful about. But on the flip side, the opportunities are endless. And when you look at just one slice of that, healthcare. And what will happen to societies and people all over the world benefiting from what we are with this technology and with us hopefully being part of it.

24:27it's going to do to lives without a shed of doubt. It's going to happen. And it's going to happen in our lifetime. And it's going to happen, you know, where I think almost every disease today that humanity suffers from will have a higher likelihood of resolution soon, sooner today than yesterday. And that's beautiful. In addition to leading this extraordinary institution, having this outlook on the world navigating economics, geopolitics. I know you're also a father. When you talk to your son and you give him advice about his opportunities for the world that he's growing up in, and then you think back to the advice you might have gotten from your father, is it fundamentally the same?

25:17That's a great question, Brad. So I think in values, it's the same. I hope. the values that my father instilled in me and my grandfather instilled in my father, I think it's the same. I believe I am doing the same with my kids, but I think life is different. You know what, I know. I mean, they're a lot smarter than us, significantly smarter than us at this age. I mean, I look at my 10-year-old, I look at my 15-year-old and what he's doing with coding. I'm like, when I was 15, I assure you, I don't know about you, but I was not quoting. I didn't even know. So I think, you know, life is different.

26:00And I think the advice on life is just different. But on values, I think it's the same. Yeah, I do agree. Values, certain values are timeless. And those that we cherish, we have to keep alive and hope that our children will keep alive. Well, thank you. Thank you for sitting down today. The year is young. There's a lot ahead of us. But I have to say, every time I visit Abu Dhabi, every time we sit down and talk, I both learn something new. And it gives me a little more hope and inspiration. And I think this is a time when there's never enough hope or inspiration in any time, especially in a world that is so dramatic.

26:43Your calm helps as well. So thank you. Thank you for your friendship. Thank you for your partnership. And Brad, thank you for being you. Well, you too. Back at you. Thank you.

27:22with production support by Sam Kripatrick at Run Studios. Original music by Angular Wave Research. Tools and Weapons is a production of Microsoft.