THIS MORNING: G42 reportedly eyeing bringing in US majority shareholder + S&P sees increased oil production as boosting growth

Good morning, everyone. It’s a busy day for AI news as Mubadala keeps stacking its AI wagers, while reports of G42 exploring a stake sale in the US resurface.

Mubadala Capital is once again backing US AI infrastructure startup Crusoe, whose USD 3 bn funding round pushed it to a USD 30 bn valuation. The company is continuing to increase its exposure after taking part in successive raises.

That comes as G42 — once again — is said to be considering bringing in a US firm as a majority shareholder, all in the name of securing long-term access to advanced US chips beyond next year’s deadline. (Our take: We flagged this months ago as something to take with a kilo of salt — and we stand on that stance.)

There’s also positive news at home, as UAE-listed firms saw their net income rise 28.6% y-o-y, with earnings surging across banking, food and beverage, and capital goods. S&P expects the UAE’s Opec exit to boost its growth outlook, with output likely to reach 5 mn bbl / d by 2029.

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UAE oil output has room to run

The UAE’s exit from Opec is starting to show up in the growth outlook. Freed from the bloc’s production limits, S&P sees output rising from 3.4 mn bbl / d before the war to 4 mn bbl / d by 2027 and 5 mn bbl / d by 2029, helping lift real GDP growth to an average 6.2% in 2027-29, from just 2.4% this year, according to its latest sovereign ratings report. Abu Dhabi National Oil Company (Adnoc) has already been targeting 5 mn bbl / d of capacity by 2027 for some time now.

That gives the UAE more than a growth boost: S&P expects the extra barrels to support an average fiscal surplus of 3.5% of GDP and an average current account surplus of 13% of GDP over 2027-29. The agency affirmed the UAE at AA/A-1+ with a stable outlook, backed by net assets estimated at 147% of GDP and government debt of around 26% this year.

The bottleneck is getting those barrels out. S&P expects energy flows to recover only gradually as damaged infrastructure, ins. constraints, and disruption around Hormuz continue to weigh on exports. But the system has already proved it can adapt: UAE oil exports were back to around 85% of pre-war levels by early June, at 4.3 mn bbl / d versus 1.9 mn bbl / d in March, helped by Adnoc rerouting crude around Hormuz and storage capacity keeping barrels moving. S&P also points to the new West-East pipeline expected online by 2027 as another layer of redundancy, saying it should double Adnoc’s export capacity through Fujairah.

The oil story is improving faster than the rest of the economy. Non-hydrocarbon sectors make up around 75% of GDP and are still expected to stay muted this year as war-related disruption weighs on tourism, trade, transport, real estate, and manufacturing.

Is G42 weighing an American makeover to secure its chips?

Abu Dhabi AI firm G42 is again said to be in exploratory talks over selling a majority stake to US companies, as Abu Dhabi's national AI champion looks for a permanent fix to Washington's chip-access strings, Bloomberg reports, citing people familiar with the matter.

REMEMBER- We've heard this one before. The Wall Street Journal ran an almost identical story in July, citing unnamed “Emirati officials,” claiming G42 planned to become “mostly US-owned.” We took it with a kilo of salt then, and nothing here changes that read: the UAE builds and owns its national champions — it doesn't sell them. The more likely story, as we’ve flagged then, and as is being reported now as an option, is a G42 outpost in the US, or G42 investments flowing into the US.

G42 itself isn't confirming anything either. A spokesperson told Bloomberg the company remains focused on executing its long-term growth strategy and doesn't comment on confidential discussions or deal reports — a standard non-denial, not evidence either way.

BACKGROUND- Washington moved the UAE into its allies-only export tier in July, letting G42 and other approved firms buy advanced chips license-free. That access lapses in April 2027 unless extended — and longer-term certainty could require changing G42's corporate structure.

This also follows talks reported last week of G42 exploring a separate multi-bn-USD capital raise from outside investors, with no word yet on size or structure. G42 is already backed by Silver Lake and Microsoft (which put in USD 1.5 bn in April 2024) and is building the 5 GW UAE-US AI Campus in Abu Dhabi on Nvidia chips. It cut its Chinese tech ties, including Huawei gear, in 2024 to win that Microsoft money and calm Washington's nerves.

Dar AlBalad is shopping for AI capability

Saudi Arabia’s Dar Al Balad Business Solutions (DBS) has signed a non-binding MoU to explore buying up to 100% of two UAE-based AI firms — Clouding Computer Systems (DWC) and Clouding Intelligence Computer Systems — the company said in a Tadawul disclosure. This is a six-month MoU for due diligence, with no price tag or financial obligation if DBS walks away.

The target bills itself as one of the region’s leading players in enterprise agentic AI and field-deployment engineering. It was the first in the Middle East to take Salesforce’s Agentforce Partner of the Year award and has built its own agentic AI product, Empathy Studio.

DBS has been busy on the balance sheet lately, lining up a SAR 20 mn facility with Emirates NBD in August, following a matching SAR 20 mn line from SNB in June.

Fake goods are getting a 24-hour eviction notice

Suppliers of adulterated, spoiled, or counterfeit goods in the UAE will have little time to clear their shelves under new executive regulations governing the country’s Anti-Commercial Fraud Law, state news agency Wam reports.

Clock’s ticking: Once given formal notification, suppliers must immediately stop selling or displaying the products in question and withdraw them from markets and warehouses within 24 hours. They must also notify all points of sale that received the goods, and publicly announce the withdrawal within 48 hours, in both Arabic and English. This deadline could be tightened if the products pose a human, animal, or environmental safety risk.

PLUS- The regulations also set rules for inspections, seizures, destruction, recycling, and, where permitted, the re-export of offending goods. There’s also a seven-day timeframe for appeals.

Data point

86% — that’s how much average displayed room rates jumped across 15 hotels near Dubai World Trade Centre on busy September dates, rising from around AED 372 to AED 689, according to a Khaleej Times check of Booking.com. The steepest increase came at Novotel Dubai World Trade Centre, where rates climbed 175% to AED 825, while rates at Ibis Dubai World Trade Centre rose 165% to AED 618.

What’s moving the needle: September’s packed events calendar is lifting demand around DWTC, with Middle East Energy, AIM Congress, Arabian Travel Market, GISEC Global, and Seamless Middle East among the major draws.

The jump fits the recovery path we flagged last month: Cavendish Maxwell expects Dubai’s hotel market to start improving from 4Q as connectivity and winter demand pick up, after 1H occupancy fell 30.3% y-o-y to 56.4%. Average daily rates held up much better, down just 7% to AED 701. Operators have been deliberately defending rates through the downturn, wagering that demand would return before they have to discount more aggressively.

PSA

If your UAE business accepts payment in crypto, the Federal Tax Authority has a message for your VAT return — whatever the currency, the numbers need to show up in AED on tax forms, as per a new directive (pdf). The rule applies to taxable businesses supplying digital currency or accepting it as payment. They must select three centralized exchanges from the FTA’s approved list — which currently includes Binance, Bybit Fintech, Deribit, Bitget, and Payward — and stick with them for the calendar year.

How it works: For each transaction, firms will have to calculate the average exchange rate of their chosen exchanges, and use that rate to determine the AED value for the tax return. The FTA said it will separately clarify what businesses should do when an exchange rate isn’t available on platforms.

REMEMBER- Crypto is increasingly being rolled out as a payment option, moving beyond speculative trading into commercial transactions in the UAE.

WEATHER- Temperatures will hit 42°C in Dubai today with an overnight low of 33°C, and 43°C in Abu Dhabi before cooling to 33°C overnight, according to our favorite weather app.

The big story abroad

Geopolitics takes top billing today. The far-right Alternative for Germany (AfD) party has vaulted into first place in Saxony-Anhalt’s regional elections, marking a notable setback for the country’s established parties. Although the AfD secured 44% of the vote in this historic victory, it fell short of the absolute majority required to become the first far-right party to govern a German state since the 1930s.

Ins. cycle ending? An influx of capital into property and casualty ins. is driving down premiums, forcing the ins. industry to brace for a downturn. Meanwhile, high prices combined with low natural disaster losses have pushed payouts to their lowest point since 2006, driving record income for insurers. Industry executives warn of an imminent market downturn as insurers and reinsurers gather in Monaco to begin annual price negotiations for 2027.

China’s next state-level capital injection: Beijing is shoring up capital across its financial system by enacting a USD 54 bn capital injection into public banks and insurers, with the country’s largest life insurer — China Life Ins. — snapping up USD 5.2 bn. The move coincides with persistently low interest rates that squeeze profitability across the ins. sector, leaving many small and mid-size carriers with weakening solvency ratios.

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