Abu Dhabi’s MGX Invests in Trump Crypto, TikTok, and OpenAI

As artificial intelligence startups aggressively pursue funding to fuel their rapidly expanding infrastructure demands, they are actively forging strategic collaborations with industry giants like Nvidia and prominent venture capital firms such as Thrive Capital, Sequoia and Andreessen Horowitz. These partnerships aim not only to secure financial backing but also to gain access to invaluable expertise and resources in this highly competitive landscape.

However, one significant financial player with a comparatively lesser-known name in the tech investment arena has emerged: MGX.

With the financial backing of Abu Dhabi’s sovereign wealth fund, MGX, launched in March 2024, has swiftly risen to prominence as a critical source of capital for hyperscalers such as Microsoft, Meta, and Google, along with burgeoning startups like OpenAI. These entities are engaged in a high-stakes race to develop the immense computing capabilities necessary to fulfill the escalating demands of AI-driven applications and innovations.

In a noteworthy development in September, MGX made a significant impact by collaborating with Oracle and Silver Lake in President Donald Trump’s initiative to ensure U.S. control over TikTok, highlighting the growing importance of safeguarding national interests in the evolving digital landscape.

Adding to its growing portfolio, MGX recently made headlines as part of a substantial AI-related transaction. MGX is joining a consortium of investors, including Nvidia, Microsoft, BlackRock, and Elon Musk’s xAI, in the acquisition of Aligned Data Centers for an impressive $40 billion, marking the largest global data center transaction to date. Aligned specializes in the design and operation of data center facilities spanning North and South America, catering to the increasing demand for robust infrastructure to support AI workloads and data processing requirements.

MGX’s origins trace back to a joint venture between Group 42 (G42), a technology holding company headquartered in the United Arab Emirates, and Mubadala Investment Company. Despite prevailing geopolitical considerations surrounding the influx of substantial Middle Eastern capital into vital U.S. infrastructure, tech companies are increasingly welcoming MGX and its significant financial resources into their operations, recognizing the mutual benefits of such strategic alliances.

MGX’s foray into the U.S. market began in the fall of 2024, a period coinciding with the generative AI boom triggered by OpenAI’s ChatGPT. The company’s strategic vision and financial prowess have positioned it as a key player in shaping the future of AI infrastructure and development.

In its inaugural U.S. deal, MGX became part of a consortium known as the AI Infrastructure Partnership (AIP), which was established by prominent firms such as BlackRock and Microsoft. This consortium committed to investing $100 billion in AI infrastructure, primarily within the U.S., indicating its strategic alignment with the nation’s technological advancement objectives. Separately, Microsoft invested $1.5 billion in G42 to foster the development of AI technologies in the Middle East, with G42 leveraging Microsoft’s Azure cloud service to drive its AI initiatives.

The AIP consortium also serves as MGX’s gateway to the latest transaction involving Aligned Data Centers. This strategic alliance underscores MGX’s commitment to strengthening AI infrastructure and accelerating the development of cutting-edge technologies in the United States.

MGX has since become a crucial partner in Stargate, the $500 billion joint venture endorsed by President Trump, collaborating with OpenAI, Oracle, and SoftBank to establish AI infrastructure across the U.S. According to PitchBook data, MGX has also made strategic investments in several prominent companies over the past year, including Databricks, Anthropic, and xAI. The chairman of MGX is Tahnoon bin Zayed Al Nahyan, who also serves as the national security advisor of the UAE and a brother of the country’s president, emphasizing the strong governmental support behind this venture.

Certain transactions raise questions about potential affiliations with the Trump administration. Industry analysts are closely monitoring these developments to determine the true nature and extent of these relationships.

Earlier this year, MGX reportedly provided $2 billion in funding to the cryptocurrency exchange Binance, utilizing a digital currency obtained from World Liberty Financial, a company associated with the Trump family. Furthermore, Al Nahyan’s visit to the White House in the spring to announce a substantial $1.4 trillion investment in the U.S. over the next decade underscores the depth of the financial ties and strategic cooperation between the two entities.

The TikTok saga continues to unfold, raising significant questions about data security, national interests, and the role of international investment in the evolving digital landscape. The convergence of these factors has ignited a fierce debate among policymakers, industry experts, and the general public.

On Sept. 25, President Trump issued an executive order endorsing a proposed arrangement aimed at ensuring the continued operation of the social media platform, TikTok, within the United States. TikTok, however, is owned by China’s ByteDance, adding a layer of complexity to the situation.

ByteDance faced a critical juncture as a result of a federal law passed with bipartisan support from members of Congress, mandating the company to either divest its American operations of TikTok or face a shutdown in the United States. This ultimatum underscored the gravity of the concerns surrounding data privacy and potential national security risks.

As part of President Trump’s executive order, MGX, along with Oracle and Silver Lake, entered into an agreement to acquire a combined 45% stake in TikTok USA. However, the details of this transaction remain officially unconfirmed, adding to the uncertainty and scrutiny surrounding the deal.

Sen. Elizabeth Warren, D-Mass., a vocal critic of the arrangement, expressed her concerns and reservations regarding the involvement of MGX and the potential implications for national security and data protection.

“MGX – a shady Abu Dhabi firm – has already cut deals to get sensitive American technology while enriching the Trump family’s crypto firm,” Warren stated last month. “The American people deserve to know if the President has struck another backdoor deal for this billionaire takeover of TikTok.” The senator’s remarks underscore the intensity of the debate and the need for transparency and accountability in such high-stakes transactions.

Representatives from MGX, OpenAI, Microsoft, and BlackRock have declined to provide comments on this story, leaving the matter in a state of uncertainty and speculation. The absence of official statements further fuels the ongoing debate and necessitates a comprehensive investigation into the potential implications of this complex deal.

According to market analyst Patrick Moorhead of Moor Insights & Strategy, the prevailing landscape may necessitate U.S. technology firms to establish partnerships with Middle Eastern entities within the realm of AI to prevent them from seeking collaborations with adversarial nations on the global stage. This geopolitical consideration highlights the need for strategic engagement to safeguard national interests and maintain competitiveness in the AI domain.

“I believe in the Middle East… we either provide the goods or they will go to China,” Moorhead emphasized, underscoring the criticality of U.S. involvement and collaboration in the region to shape the trajectory of AI development and innovation.

Furthermore, Moorhead noted that MGX’s strategic approach mirrors that of Saudi Arabia’s Public Investment Fund, which seeks to diversify its investments away from oil and into promising sectors such as AI. This diversification strategy aligns with the evolving economic landscape and the imperative for nations to adapt to emerging opportunities.

“The amount of capital required is astronomical,” Moorhead remarked, highlighting the immense financial resources required to sustain the exponential growth and development of AI technologies. “And they’re willing to take the risks,” he added, acknowledging the willingness of Middle Eastern investors to invest substantial capital in pursuing long-term gains in the AI sector.

Despite the considerable financial resources commanded by tech giants such as Microsoft, Meta, and Amazon to support their AI endeavors, additional funding sources are always favorably received, given the scale and complexity of AI projects. This explains why many AI leaders opt to lease AI capacity from specialized companies like CoreWeave instead of assuming the financial burden of building proprietary infrastructure. This collaborative model permits businesses to allocate resources efficiently and concentrate on their core competencies.

“I think they will find real acceptance among VCs because people are comfortable with sovereign wealth,” remarked Bradley Tusk, a venture capitalist and co-founder of Tusk Capital Partners, underscoring the potential for sovereign wealth funds to gain credibility and acceptance within the venture capital community. “This is a tough fundraising environment, so they’re a potentially good source of capital,” he added, emphasizing the advantages of sovereign wealth funds as a valuable source of capital in demanding fundraising environments.

While acknowledging the prospects for MGX, Tusk cautioned that the organization could encounter political entanglement and public perceptions regarding its proximity to the Trump administration, potentially posing challenges if a Democrat holds the presidency in the coming years. This political risk underscores the necessity for impartiality and transparency in international investments to avert controversies and maintain stakeholder confidence.

“I think the biggest risk is that the only narrative right now is they are Trump’s friends,” Tusk concluded, indicating the need for MGX to establish its reputation independently and demonstrate its commitment to long-term strategic goals, irrespective of political affiliations.