THIS MORNING: Mubadala eyes more Asia exposure + more The Boring Company projects could be in the pipeline

Good morning, everyone. Today we’re diving deep into two sectors: defense and employment — both of which have been rattled by the war at a time when their internal dynamics were evolving.

First up: The war has made the UAE's defense industry look like a self-reliance story, but Edge still mostly sells abroad. Despite appearances, these two trends aren’t pulling in opposite directors, but rather can work to build scale at home while still filling the gaps in-house manufacturing can’t close yet.

On the jobs front: UAE employers have entered somewhat of a hiring freeze against a backdrop of the outbreak of war and AI evolving at breakneck speed. We spoke to experts to figure out how much of this is the war, and how much is the robots.

We’re also following news that Mubadala is looking to replicate last year’s USD 39 bn deployments, only this time with a greater focus on Asia, and of possible new projects between Abu Dhabi and Elon Musk’s The Boring Company after a recent exploratory pact.

The Gulf’s sovereign funds and largest companies are committing billions to AI infrastructure at home and to AI companies in the US and beyond. EnterpriseAM AI + Innovation reports on where that capital goes, who controls it and what it is actually buying.

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Mubadala eyes more Asia deployments

Mubadala’s USD 39 bn investment engine isn’t slowing down. The sovereign wealth fund is planning on deploying another USD 39 bn this year, after closing out last year with USD 39 bn in investments, The National reports, citing comments made by CFO Carlos Obeid.

Looking east: The sovereign wealth fund is looking to continue its recent focus on Asia, which has seen its exposure to the market increase from 10% to 13% of its portfolio over the past years. Mubadala is targeting deploying funds in China, India, South Korea, and Japan in particular, adding to its existing presence in these markets, he said. As it stands, the lion’s share of the fund’s investments are concentrated in North America, at 44%, followed by the UAE with 24%, and Europe with 15%.

Will the strategy change? AI and advanced technology secured a significant portion of last year’s deployments. That focus area doesn’t look likely to fade to the background anytime soon, with Obeid flagging technology as a priority sector once again, along with the energy transition, shifting supply chains, and changing consumer behavior.

Asian markets present opportunities in all four focus areas, as net energy importers and production hubs for renewables equipment, changing consumer spending and consumption habits, and key manufacturers of advanced tech supplies like semiconductors. When it comes to the latter, Mubadala will likely tread carefully when it comes to Chinese investments, given heightened US scrutiny when it comes to tech.

The papertrail is already making tracks: Just last month, Mubadala took a minority stake in China’s biggest coffeehouse chain by story count, Luckin Coffee, alongside its controlling stakeholder for around USD 1 bn. Since entering the market in 2015, the sovereign wealth fund’s investments have reached USD 20 bn.

More from Musk?

Elon Musk’s The Boring Company (TBC) could be doubling down on its UAE presence, after the Abu Dhabi Projects and Infrastructure Centre (ADPIC) has inked an exploratory pact with TBC to evaluate underground transport, utility corridors, and next-generation urban infrastructure across the capital, as per Abu Dhabi Media Office.

REMEMBER- The company is already carving out the initial 6.4 km Dubai Loop connecting DIFC to Dubai Mall, backed by a massive USD 3 bn Series D round — funded heavily by UAE investors — that valued the firm at USD 23 bn and targeted over 150 km of local tunnel networks.

TBC is best known for its loop system: which uses EVs to move passengers through tunnels. The Abu Dhabi pact stays exploratory: no routes, construction timelines or project costs have been committed.

In context- The UAE’s Musk portfolio keeps growing. MGX has backed xAI, G42 has invested in Neuralink and MGX, Alpha Dhabi, and IHC have direct or indirect exposure to SpaceX. Any concrete results from the agreement would add an underground transport element to a growing UAE investment footprint across Musk’s AI, space, and neurotechnology businesses.

Sharjah wants India’s next Gulf base

With Strait of Hormuz routes crippled and Jebel Ali bottlenecks mounting, Sharjah is playing its geopolitical trump card. The emirate is leveraging a USD 2 bn expansion at Khorfakkan Commercial Terminal to target USD 3 bn in Indian FDI across 2026 and 2027, Economic Times reports. It is the UAE's only fully commercial deep-water port sitting safely outside the Strait of the Gulf of Oman.

The pitch is regional: companies can use Sharjah as a base to reach Saudi Arabia, Kuwait, Iraq and wider Gulf markets, while staying connected to east-west maritime routes. The Sharjah FDI Office expects about USD 1.5 bn this year and another USD 1.5 bn next year — a roughly 15% surge from the previous year. Manufacturers and logistics majors are rapidly securing industrial acreage around Khorfakkan to establish export hubs serving Saudi Arabia, Kuwait, and Iraq without braving maritime chokepoints.

Khorfakkan opens up: The emirate is seeing rising enquiries from manufacturing, logistics and transportation companies, and strong demand for industrial land near the port, said Mohamed Juma Al Musharrkh, CEO of Invest in Sharjah.

IN CONTEXT- Port operator Gulftainer is actively scaling Khorfakkan’s container capacity from 3.5 mn to 5 mn TEUs, eyeing a long-term 10 mn TEU target.

PSA

WEATHER- It'll stay warm this weekend, with highs of 41°C and overnight lows of 28°C in Abu Dhabi, while Dubai will see highs of 40°C before it cools to 29°C overnight, according to our favorite weather app.

The big story abroad

It’s another morning of AI and war updates leading the conversation in the international business press. The two biggest headlines this morning:

OpenAI will end the year with at least USD 70 bn in annualized revenue, the company expects, with its annualized revenue sitting at USD 50 bn at the end of September, Bloomberg reports. The end-2026 forecast, which the ChatGPT maker shared with investors as it looks to raise USD 30 bn, is calling into question previous signals from OpenAI that its annualized revenue was already around USD 70 bn in September, the Financial Times notes. The gap arose “from attempts by OpenAI’s investors to produce a direct comparison with Anthropic’s annualised revenues,” the salmon-colored paper says.

The Houthis ramped up their attacks on Saudi Arabia, with renewed strikes on Riyadh’s King Khalid Airport and elsewhere in the Saudi capital yesterday. Several airlines, including Lufthansa and Air India, have moved to suspend their flights to Riyadh after the attacks, Reuters reports.

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