AI Is the Real Deal for Investors—if You Understand It. Our Roundtable Is Here to Help.
21 min
It has been less than a year since OpenAI changed the world overnight with the release of ChatGPT. Since its November launch, the chatbot’s display of generative artificial-intelligence software has triggered a reshuffling of investment priorities in Silicon Valley, on Sand Hill Road, and on Wall Street. Almost every company—and this goes well beyond tech—has prioritised the development and adoption of generative AI.
The notion of artificial intelligence, or computers that can “think,” has been around since the Cold War. What makes generative AI so fresh is the ability to answer questions posed as simple natural-language requests—and respond with rich, creative content in the form of text, music, video, images, or even poetry.
Generative AI promises to democratise the power of large data sets, making it dramatically easier for people and businesses to find information, create content, and analyse data. And yet, AI isn’t magic, despite all appearances to the contrary. The technology is creating widespread worries about the misappropriation of personal information, the misuse of copyright-protected content, and the creation of false and misleading data. Some people even see AI as an existential risk to the future of life on Earth—a recent Time magazine cover asked whether AI will eventually lead to “The End of Humanity.”
To consider the outlook for AI, how it works, where the risks lie, and who will lead the way, Barron’s assembled a panel of five experts who approach AI from divergent angles. Our AI roundtable panelists included Dario Gill, director of research at IBM, which has spent decades working on artificial-intelligence software and hardware; Irene Solaiman, policy director at Hugging Face, a marketplace for AI models, data sets, and software; Cathy Gao, a partner at Sapphire Ventures, which has committed to investing at least $1 billion in AI-focused start-ups; Mark Moerdler, a software analyst at Bernstein Research who completed a doctorate in computer science and artificial intelligence in 1990; and Brook Dane, a portfolio manager at Goldman Sachs who lately has revamped his investment strategy to focus on AI stock plays.
The conversation took place in early August on Zoom. An edited version follows.
Barron’s:Let’s start by framing just how big a deal generative AI is. The biggest thing since the Web? The iPhone? Electricity? The wheel? Dario, IBM has been working on AI for decades—it has been 12 years since Watson’s famous appearance on Jeopardy. So, what has changed?
Dario Gil: IBM has actually been involved in AI since 1956, the year of a famous conference we co-sponsored called the Dartmouth Summer Project on Artificial Intelligence. Arthur Samuel, an IBM computer scientist who did pioneering work in AI, coined the term “machine learning” in 1959. So, yes, the idea of AI has been around for a long, long time. The past decade or so has been the era of deep learning and neural networks, where we discovered that if you could label enough data, you could achieve superhuman levels of accuracy.
But that turned out to be extremely expensive.
Gil: Right. There were only a handful of institutions that could actually amass enough labeled data—say, hand-tagged photographs—to generate good value and a reasonable return on investment. The fundamental reason why there’s so much excitement around AI now is this transition toward “self-supervision.”
Explain that for us.
Gil: The advent of foundational models—the basis of generative AI—allows us to take large amounts of unlabelled data and create very powerful representations of language, code, chemistry, and materials, or even images. And as a consequence of that, once you train these models, the downstream use cases allow you to fine-tune or prompt or engineer them with a fraction of the energy, effort, and resources that historically would have been required to create those use cases. It’s what is unlocking this productivity moment in AI.
Bill Gates has said that ChatGPT was the most impressive technology he’d experienced since he first saw a graphical user interface in 1980—that it was as fundamental as the creation of the microprocessor, the PC, the internet, or the mobile phone. Nvidia [ticker: NVDA] CEO Jensun Huang says AI is having an iPhone moment. Cathy, Sapphire just announced a commitment to invest $1 billion in AI start-ups. Does this moment really feel that big? What is the opportunity that Sapphire sees?
Cathy Gao: In AI, we invest end to end, in everything from the plumbing to how data move through the stack to the application layer. With AI, we are definitely seeing a similar arc to other platform shifts. We believe that this is a significant platform shift. We’re in the early stages of that explosion, headed ultimately to ubiquity.
But why now? What makes this the moment?
Gao: It’s being driven by many things. One of the keys is that the consumer imagination has been captured. ChatGPT reached 100 million users in a groundbreaking two months. You can see a future where AI becomes so ubiquitous that companies no longer market themselves as “AI companies” because they’ve all become AI companies. In part, this is about ease of use, the ability to leverage foundational models via API [application program interface, a protocol for software programs to connect], so you’re not having to rebuild them every time. You’re not having to build these LLMs [large language models] from scratch. And the other element is the end-user experience, which will take us to the next phase of ubiquity.
Mark, you earned a doctorate in artificial intelligence a few decades back. What’s different now?
Mark Moerdler: It feels like 100 years ago. We were learning how to do very basic things with AI. Since then, we’ve seen massive improvements in technology. Underlying computing capabilities have massively expanded. You couldn’t run the types of learning models that you can do today, because the computers couldn’t deal with that capacity. We were using far smaller computers, with less memory, storage, and bandwidth.
And I would agree with Cathy that this is all about conversational AI. Until now, it’s all been under the hood. Now, you can hold a conversation with software in the same way you might talk to a person, and the system will respond to you, maybe with a report, or by creating an image, or simply with an ongoing conversation.
This was all sparked by ChatGPT and a consumer experience, natural-language chat. Will consumers—and advertising—ultimately be the revenue source for this business, or will it be more about a growing market for enterprise applications?
Moerdler: Some of the largest companies in the world—including Microsoft [MSFT] and Alphabet [GOOGL]—are involved in both consumer and enterprise AI software. There will be disruption on the consumer side, in terms of where you search for information. But arguably, the bigger value creation is going to be unlocking the data within enterprises, to leverage that data to drive efficiencies within organizations, make leaps of intuition in coming up with answers, or make decisions faster, or in some cases reach conclusions you couldn’t previously reach because you didn’t have easy access to the data.
Gao: What’s happening in Gen AI on the consumer side and the B2B—or business-to-business—side are highly symbiotic. They’re feeding into each other. There is a huge opportunity for enterprise software companies today, and that’s why you’re seeing a lot of investment. Gen AI is the ultimate double-edged sword. On the one hand, it represents tremendous potential to be transformative, and the key to future growth. But it can also create new competition that could be hard to beat, in some cases creating existential risk for the incumbents.
Gen AI can increase the addressable market for many companies and industries. Take a core system of record like ERP, or electronic medical records, or a payroll service like ADP, which stores a lot of valuable data. Often, the existing customer interface layer limits many potential use cases. Gen AI can be used to reimagine and reinvent workflows, and to open up the addressable markets in a significant way.
Irene Solaiman: It’s important to step back and think about what systems we are discussing, because there are so many language models out there. When we’re talking about generative AI, the way you would do research on or adapt them to a given application is going to different by modality. There’s a lot of chatter around chatbots, but there’s a lot happening with imagery and audio and even video that isn’t the subject of as much research or literature as there is for language. There’s so much opportunity.
Remember, also, that these base systems often aren’t developed for a specific use case. They may be optimized for tasks like code generation. But generally, they can be applied to many different fields, which is exciting. There are also risks; we need to figure out what safeguards we need.
Irene, I was visiting the Hugging Face website and was struck by the number of models and data sets your site offers. This isn’t just about Microsoft, Meta Platforms [META], or Alphabet.
Solaiman: We have almost 300,000 different models, over 100,000 applications, and more than 50,000 data sets. Not all of the models are focused on natural-language processing. There are models for more-specific fields, like biomedical AI. There’s a lot of discussion around advanced models like OpenAI’s GPT4. But that’s not what everyone is going to use. Large language models are computationally expensive to run. At Hugging Face, we’re seeing a lot of researchers use much smaller models that are cheaper to adapt and fine-tune.
That raises questions about where the value lies—and who the winners will be. Brook, it’s your job to identify AI winners. Do you see the value going to those that have the data, or the application vendors, or someone else? How do you approach that when looking for AI-related companies in which to invest?
Brook Dane: It’s incredibly early in this journey, especially when you look beyond the providers of semiconductor and networking infrastructure, like Nvidia, which has a near-monopoly on graphics processors used to train models. When you think about the software layer, it is TBD—to be determined—on some of these things. Early on, though, it appears that this idea that data have gravity and will be the source of competitive advantage appears to be true. We’re focused on that.
Beyond infrastructure, we are spending the bulk of our time on data, and which players can drive value and capture value over time. The other issue is that, unlike some other big tech transitions of the past, you don’t have to rewrite the entire software stack. In other words, I wonder whether there will be as much disruption to the leaders in the marketplace as in previous shifts. The shift to mobile and the internet created a whole new class of companies that rose up and displaced the incumbents. I wonder if this time the incumbents will actually reinforce their power, because they already have the data.
Moerdler: I agree. The speed of building models is very high. We’re talking months, not years. It’s just a matter of money. Differentiation is going to create sustainable value where you can create something trained on unique data and capabilities—and where the uniqueness is sustainable. In traditional software, the moat was created because it took so much time to create the technology. For a competitor to catch up took a really long time. Here, everyone is building capabilities. If you can’t differentiate, you aren’t going to be able to monetise it.
We’ve talked a lot about models and data sets. What differentiates the two?
Moerdler: When people talk about models, there are several types. There are generic models trained on very large data sets, for the purposes of answering more generalised queries, like ChatGPT and Bing. There are specialised models for very specific problems—say, in chemistry or materials sciences. And there’s an enormous amount of data sitting inside companies. Companies may choose to use a more generic model and ground it with their corporate data.
Gao: Let me give you an example to illustrate what Mark is saying. One of our portfolio companies, MoveWorks, is an AI chatbot that cuts across enterprise applications like information technology, service management, and human resources, and adds company-specific data. If a customer has a conference room called Taylor Swift, for instance, and you ask a public chatbot if Taylor Swift is available at 9 a.m., the model is going to get confused. But if the chatbot is infused with information about the company’s conference-room names, it can produce an accurate answer.
Gil: The pattern of consumption is essential for how AI is used in the real world. So, you start with your base model, and then you load your records of, say, past customer exchanges and service documents around that—you’re fine-tuning the model so it incorporates your local data. Productivity gains are linked to that idea. Once you have base models for solving IT problems, all of a sudden your internal team can do 50 or 100 projects a year. In the era of just deep learning, having to label everything by hand, where every model was custom, you could do just four or five projects.
Solaiman: I always use the term “system” instead of model. But I’m so glad to hear all this talk about data. And when we’re thinking about system life cycles, there’s a lot of work, as Dario was saying, that goes into data collation, curation, and governance. An organization is going to train on an open data set that may have been collated and curated by somebody else.
This brings us to the question of why this is all happening now. We have much more impressive systems than we did just a few years ago. We have better techniques and better infrastructure, including more efficient computing, more computing, and more data. And we have better safety research, better fine-tuning of the information, and better accessibility, not just via APIs, but with models that are more compute-efficient, that can run even on local hardware.
In an interview with Barron’s after the latest Palantir [PLTR] earnings call, CEO Alex Karp said that this technological revolution favors the incumbents—unlike previous tech disruption that advantaged new companies. He thinks the winners will be familiar players, not new ones. Brook, you already touched on this idea. Cathy, as an investor in new companies, do you find that discouraging?
Gao: That’s the No. 1 question. Look, the incumbents have scale and capital. They have the computing resources, which are scarce these days. And they have tremendous data. They have key ingredients to be very, very successful around Gen AI. The incumbents are certainly going to be playing an outsize role in this era. I’m talking about hyperscalers, such as Google, Amazon.com [AMZN], Microsoft, and others, that are aggressively investing in this technology. On its latest call, Microsoft mentioned AI 59 times.
That’s even more times than the 53 times that Microsoft said the word “cloud.”
Gao: For an investor like me who is looking for the disrupters, the biggest question—and the biggest risk—when you look at most Gen AI application software companies is, what if Microsoft, or Google, or Adobe [ADBE] does this in the future? Is this new company going to be wiped out? The differentiators will be the same as with any software-as-a-service application. It will be about customer and product experience being deeply embedded into workflows, and that data moat that we talked about earlier.
A lot of the founders I’ve been speaking to over the past couple of months, when asked about Gen AI suddenly blowing up in the past two quarters, always say the same thing. They say, on the one hand, that it has been amazing for the market, with inbound queries just flooding in. But at the same time, it has lowered the barrier to entry for new players. Plus, the hyperscalers like Amazon, Meta, Alphabet, and Microsoft are now paying more attention to this opportunity.
Dane: I agree with everything Cathy just said. In every transition, new companies emerge, and some become large. But there really is a power of incumbency here, because of the need for data, and because you can develop these tools and techniques relatively quickly, the way Microsoft has announced AI software across its software stack. The incumbents do have a huge advantage. It’s going to come down to leadership and execution, as it always does, and especially in a time like this when the market has been through a period in which it has been focused on margin expansion. There’s a level of investment required to do this, and some of the incumbents are going to hesitate to spend what they need to spend to be relevant players. But the advantage starts with incumbency on this transition.
Mark, do you agree?
Moerdler: Yes, but let me add to that. AI is a data-driven learning experience. The more you have access to data, theoretically, the better your product becomes. And therefore, the quicker you can get to market, the more you can absorb in terms of information, the broader the reach—it has somewhat of a self-fulfilling prophecy effect. But as Brook rightly said, it comes down to execution, and there are many companies now that are giving lip service to generative AI rather than the significant focus and investment that may be necessary to create a moated solution.
Dane: As I think about my models and forecasts across the software ecosystem, the ones that execute well in this are going to see a lower churn rate, higher customer retention, and higher upsell and cross-sell into their installed base. You’re starting to see companies for which your degree of confidence in the two-, three-, four-year-out free-cash-flow outlook is structurally higher now. All of this is still super-early, and I’m not sure that it impacts the next 12 months’ cash flows in any material way. But as I think beyond that horizon, I get increased confidence in their ability to be bigger, stronger, faster businesses.
It seems clear that we’re not talking just about the importance of data held by tech companies. Legacy companies in areas such as financial services, pharmaceuticals, and materials have tons of data, too.
Gil: Understanding the moment as a shift in data representation is really important. It may sound a little bit abstract, but it is profound. When the relational database was invented, there was a form of data representation that we’re all accustomed to, of rows and columns. Databases were invented to do that well, transaction processing systems do that well, and it had huge implications for payroll and finance and accounting. Now, imagine instead a graphical data representation. It turns out that graphical representation is essential to do things like search, social media, and so on. You’re going to take the data that you have today, relational databases, graphs, and so on, and map them to this new way to encode information.
So, who gets to be a value creator? Enterprises and governments the world over have the most data. It looks at the moment like all of this is concentrated in about five American companies, but that isn’t how the future is going to evolve, because contrary to popular opinion, and thanks to open-source initiatives, the democratisation of AI is perhaps the most important force at present. Understanding how much simpler it will become to take advantage of these large language models, to adapt them, to create them, will turn out to be the defining trend as it gets internationalised and democratised, and value creation gets more distributed.
Solaiman: That’s one of the reasons I do this work. What we’re building has a lot of potential, but potential for whom? For instance, what are most keyboards optimised for? Latin character alphabets, like English. When I worked at OpenAI, I used to test a lot of the models, not just in English but also in the only non-Latin character language I understand, which is Bangla, the national language of Bangladesh. I got to see Bangla-speaking researchers working in a language deeply underrepresented in natural-language processing. When you make systems work for many different groups of people, opportunities open up. The question from a governance point of view is, how do we make sure data collection isn’t exploitative and appropriately represents every community.
That brings us to an important topic, which is regulation, and mitigating risks and potential harms. There are questions around job loss, intellectual property protection, and deep fakes. Congress has held hearings. Do we need a new regulator? New rules? And how do we do that without reducing the competitive position of U.S. companies relative to those in China or elsewhere?
Moerdler: We’re in a new era. Regulators don’t necessarily have the experience in this area. They are learning as the rest of us are learning exactly how to deal with it. Regulation, like everything, can be a two-edged sword. It can be used to limit bad actions. It could also limit development. There needs to be control to assure governance, privacy, and security, that the systems aren’t misused by bad actors. There needs to be some level of standardization of requirements, of control, and maybe even regulation. But it has to be done in a thoughtful way, or what will end up happening is that you will create an opportunity for companies outside the U.S. to take market share and take advantage.
Irene, what is your sense of this?
Solaiman: Good regulation is hard to do. Regulators wear so many hats. They can’t be experts in AI. But what they are experts in is the public interest. I want to learn from policy makers in which direction they think AI should be going. But it is immensely difficult to regulate. And what systems are we actually talking about? There’s not one single piece of legislation that is going to affect every aspect of AI. Regulators in the U.S., the European Union, the United Kingdom, and Canada are trying. There is an unprecedented level of attention in Congress. Hugging Face is pro regulation, but we want that to be in a way that guides innovation in the right direction. There needs to be better standards, but that means working together closely. There are incredible experts throughout all of these regulatory bodies on what that would look like and how that can be extrapolated to non generative AI systems, as well.
Gil: A framework of precision regulation would serve the industry well. Look at the work the EU did in the past few years. They developed a very thoughtful approach on use cases and risk-adjusted regulatory frameworks. There’s a huge difference between applying AI in a nuclear reactor and applying AI for a pizza-recommendation system. Right? And so risk-adjust, where you categorise how much harm this is likely to cause, or how much risk this is going to induce in society, and use the appropriate regulatory bodies to beef up the expertise.
Enable every agency to become an AI agency, an additional element that they incorporate. This is in contrast to having a single AI regulator that is going to figure out the whole thing. Regulating the technology itself, regulating mathematics, is a really bad idea. And there are people talking about registering the models—that’s the wrong way to go.
Focus on the use cases. Focus on the harm and the impact around that, and regulate using existing bodies against those by beefing up their AI knowledge and expertise and sophistication. Sometimes, the hyperbolic rhetoric that has come even from the tech industry is causing more harm than good. Lowering the tone and focusing around the harm and the damages and the impact, and on those regulatory bodies and the people who are doing that, would be the right way forward for precision regulation.
Cathy, how does the risk of added regulation affect your thinking about where to put Sapphire’s money?
Gao: It’s something we consider closely. We’re still in the very early innings—there are a lot of unknowns. Venture capital is a high-beta asset class by definition. But we want to be smart about the risks we take. When it comes to AI, many of the use cases we’re looking at right now are less likely to be a target of regulatory scrutiny. We’re not looking at companies that affect life or death, like in healthcare. Still, we’re following it very closely. We definitely take that into consideration, but we also accept that some of the unknowns will remain when we make an investment.
Moedler: These systems could be problematic from a privacy point of view, from a bias point of view, from an intellectual-property point of view. Investors need to think through where they could be exposed. It may not be regulators. It may be the fact that, you know what, you trained up these solutions, and the responses they’re giving impinge on other people’s IP, and therefore your clients—and you—are going to get sued. That becomes part of the math you need to do when determining whether these systems are going to become good, sustainable businesses that will generate not just revenue, but also profits, over a long period. Investors need to think carefully about where the exposure can be, whether they’re going to cross a line or create some legal, regulatory, or economic exposure.
One other risk that has been widely discussed is the potential that AI will cost people jobs. Is AI going to be a net job creator—or destroyer?
Gil: We have a couple of hundred years of evidence that the nature of jobs changes over time. A hundred years ago, half of the U.S. population was working in the fields. So, first of all, this phenomenon isn’t new. Whenever really disruptive technology emerges, people think this time will be different. The evidence suggests that won’t be the case. There’s a lot of good analysis that jobs are composed of many, many diverse tasks, and some will be subject to automation while many others won’t. The key metric that people are focused on is whether we can deliver on the productivity promise. With better productivity, we can generate more wealth, and invest in things we care deeply about to create better institutions, a better society, and so on.
I’m more worried about whether we can deliver solutions fast enough to reach the productivity gains we need, and discover solutions to the problems that we face. When I talk to people about advances in AI, semiconductors, and quantum computing, and they are stressed out about the rate of technological evolution, I like to say, look around. I don’t think we’ve run out of problems to solve. And if we can use these technologies to accelerate how quickly we can discover some of these solutions, we are all going to be very well served. One of my fears is definitely not that people won’t have jobs because of the advances in AI. History tells us that.
Solaiman: Just five years ago, one conversation was around how autonomous vehicles would replace drivers and cost the jobs of truck drivers and others. But it turns out, the most adversarial environment is the real world. I’d like to see more research on how we augment and not automate. What will be the impact on the wage distribution? Should people’s wages be reduced if they’re being helped by AI? There are important economic questions.
OK, we have to discuss the notion that generative AI is an existential threat to humanity, as some have warned. It’s worth mentioning here that there’s a difference between generative AI—what chatbots do—and artificial general intelligence, or AGI, the idea that software can be sentient and act on its own, like HAL in the movie 2001: A Space Odyssey.
Gil: I’m very opposed to that language of existential threats because it distorts things in a significant way. First of all, it freaks out our fellow citizens. To some degree, some of the people who espouse that language are behind the scenes aiming at regulatory capture.
Solaiman: A fun fact about me that’s not very public is that I worked on AGI for a while. When I was working on that, a lot of what I was thinking about through my research was, if we’re building these incredibly powerful systems, whose values do they represent? My primary motivator now is to make AI systems work better for underrepresented people in the technical world. A lot of the harms to marginalized people truly are existential to those communities.
But we’re not going to be serving robot masters soon, right?
Moerdler: The more immediate issue is how the AI is used and misused, not whether the AI itself is going to decide to cause damage. That’s the crux of the issue. Worry about how it’s going to be used or misused, because it’s a long time horizon before you have to worry about AI making decisions. People are trying, as Dario said, to blow this out of proportion for other purposes.
Let’s take a few minutes to talk about AI stocks. Brook, when we last talked a few months ago, you walked me through a bunch of non obvious ideas for AI investments. Are you still finding attractive things to buy, despite a big rally in the stocks?
Dane: First, as I’ve said, it’s very early. We’re in the emergence of this technology right now. The landscape is going to change dramatically over the next one, three, five years. Investors have to pay attention to how these things are changing and where opportunities emerge. The second thing is that, in general, there’s going to be considerable differentiation between winners and losers. Right now, the obvious plays are the ones getting revenue today, the picks-and-shovels players, semiconductor components, and networking, and then the big cloud vendors.
We’re at a funny moment, though, where the market has realised that there is going to be a boom in applications, and that there will be a bunch of infrastructure software that gets pulled along with this. There are exciting opportunities, but that isn’t going to move numbers for calendar-year 2023. So, as long as your investment horizon is long enough, you’re likely to see the payoff from this. If you’re trying to manage a portfolio from now to the end of the calendar year, the companies that are seeing the benefit are the very obvious choices that have already moved, like Nvidia and Microsoft and Alphabet.
When Microsoft reported June-quarter earnings a few weeks ago, the market’s reaction was a little tepid. The results didn’t really reflect all of the things they have been saying are coming on the AI front.
Dane: As we’ve moved through this latest earnings period, you saw a lot of companies produce results that have been ahead of expectations or right in line with expectations. Nobody has particularly gotten aggressive about raising guidance, and stocks have sold off into that, because they had large moves into the end of the quarter through June and July. People were expecting some excitement. The excitement is coming in a lot of these names, but just not in the next 90 days.
Microsoft seems incredibly well positioned from our perspective, given what the company is doing with Copilot and Azure. For us, that seems like a compelling opportunity.
Give us a couple of other picks.
Dane: I’m bullish on Marvell Technology [MRVL], which makes chips used in data-centre networking. It will grow right alongside Nvidia. Its AI-related business is around $200 million in revenue, and should double in each of the next couple of years. The stock has moved up, but so have estimates. This is a picks-and-shovels play, where the numbers are going higher.
Another company we like is Adobe, which dominates the creative software market. We’ve been hearing good things about the beta test for its corporate version of Firefly, Adobe’s collection of generative-AI tools. From what we hear from the sales channel, the beta version is doing exceptionally well. One of the biggest advantages that Adobe software offers is that customers will be protected from copyright infringement for their text-to-image software. There’s a little bit of TBD around how big this is—we still don’t have pricing information—but this is one of those situations where the incumbent has an advantage.
And what about Nvidia?
Dane: We have owned it and continue to own it in our large-cap and tech-focused funds. But we’re always managing risk and reward with position sizing; you want to make sure you stay in balance. As the leader in graphics processors, they are in a unique position—they are really benefiting from this wave. The business will do exceptionally well, but valuation has a range of outcomes.
Mark, you wrote a piece recently that asked if we are in an AI bubble. Are we?
Moerdler: We’ve been in an expectation or optimism bubble. The investor community has gotten enthusiastic about the near-term revenue that’s going to be generated by the technology. Again, this technology exploded on the market. Investors looked at it and went, OK, it’s going to generate meaningful revenue in a relatively short period. Expectations moved up, and valuations moved up accordingly. Many management teams started talking about their AI solutions. You could literally watch stock valuations move up the more they talked about AI, even though they weren’t giving you any guidance about when and how much. We’ve seen multiples move up to relatively high ranges, approaching what we’ve seen at peak multiples in recent times, without that line of sight to the revenue-generation possibility.
And so from that perspective, there is a bit of a bubble going on. It’s going to take longer than many people believe for AI to drive meaningful revenue. That doesn’t mean no revenue, but enough to move the needle from a revenue growth perspective or an earnings perspective. It is likely that in most cases, revenue is going to lead earnings here because there’s a lot of investment required to offer AI tools. You’re using them in the cloud. You’re paying for that usage, even if you own it yourself. You’re probably paying a premium right now, because of the GPU [graphics processing unit] shortage. And so, yes, we got a little bit ahead of our skis.
I also don’t think the rising tide will lift all ships equally. It’s going to come down to the companies that are able to create differentiated capabilities, protected against competitive threats—and that have the ability to monetise them. A lot of companies are going to add AI capabilities, and it is going to be, at least in the near term, a cost of doing business. It isn’t going to be monetisable because your competitors are going to add similar capabilities.
As Brook discussed, you need to think about the time horizon. We think of three buckets. There are the companies where you can see differentiation in what they’re offering now. There are companies that are adding AI, but it may just mean a higher cost of doing business, at least for the near term. Longer term, years from now, it could become real. And then there are the companies that will be disrupted. Most companies are in that middle bucket today.
Which companies would be in the first bucket? And the last?
Moerdler: Two of the companies that I put in the winners bucket were just mentioned by Brook—Microsoft and Adobe. I put in the losers list companies offering no-code and low-code software solutions; they are going to face new competition from AI-written code. For the losers, we see a combination of increased customer attrition and pricing pressure. Almost everything else is the middle bucket. For most companies, generative AI won’t be a major differentiator but will be necessary from a competitive positioning perspective. Most of these are jumping on the AI bandwagon, and while they should be able to get functionality to market quickly, it won’t be differentiated and, in many cases, really valuable to customers.
Dane: One thing to note: The opportunities in tech companies are compelling right now, with AI as an option in front of them. Business fundamentals are largely stable. The economy is in better shape than we all thought it would be six or nine months ago. These companies have largely pivoted to driving cash flow and operating income instead of chasing growth for growth’s sake. And then you have this optionality around AI.
Moerdler: Agreed. If your focus is on the value of the business, and the upside from AI, you’re going to get better a risk-reward in terms of your investment profile than if you jump on the all-about-AI ship, because it may just take longer until that revenue comes to fruition.
While tech stocks have had a big year, and everyone is talking about AI, there haven’t been any AI initial public offerings, or really any IPOs in tech. Cathy, what does that say about where we are in the development of the AI sector?
Gao: When the general IPO markets will unfreeze for tech is the million dollar question. I have no idea. In any case, it’s going to take a while before we see pure-play AI companies come public. The speed of adoption that we’re seeing in this cycle with AI has outstripped anything that I’ve seen in prior platform shifts. But maybe there’s something we can learn from the internet revolution that could be applied to the current era. In the internet era, the first wave of companies that came out weren’t the ones that ultimately succeeded. It was more the second wave and the third wave that watched their predecessors, learned from their mistakes, refined, rehoned, and went out. My gut is telling me that this is going to take a while.
Everyone, thanks for a fascinating conversation.
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Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Visa and Whish Money SAL have partnered to expand Visa’s payment and money movement services to over 1 million app users. This strategic partnership is the first in the Levant region, aligning with Whish’s values of trust and innovation.
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Visa, a global payments technology leader, and Whish Money SAL, a leading regional fintech, are pleased to announce one of the most strategic partnerships in the region. This partnership will enable Whish to leverage Visa’s advanced services and technology for payments and money movement, while allowing Visa to expand its service offerings to over 1 million Whish app users. A signing ceremony was held to commemorate this significant collaboration, marking a new chapter in the fintech landscape of the region.
Leila Serhan, Senior Vice President at Visa and Group Country Manager for the North Africa, Levant and Pakistan (NALP) region, commented on the partnership: “This strategic partnership between Visa and Whish is the first in the levant region with an e-wallet and money transfer company, and we align with Whish on multiple pillars, most of which, trust and innovation. This partnership will enable us to bring our advanced payment technologies to a broader audience, facilitating seamless and secure money movement across the world. And as Whish is already present globally and is further expanding its reach, we can further facilitate the international growth through our presence in over 200 countries.”
Toufic Koussa, CEO and Co-Founder of Whish Money, added: “We are excited to embark on this new collaboration with Visa which marks a significant milestone for Whish Money. By integrating Visa’s cutting-edge technology and services, we are poised to enhance our payment solutions and provide even more secure and efficient financial services to our customers. This partnership underscores our commitment to innovation and excellence in the fintech industry and is a testament to the thorough and careful due diligence Visa undertakes while engaging in such an affiliation given their high compliance standards. Our commitment to compliance and security has enabled us to achieve this unique partnership in the region.”
This strategic alliance between Visa and Whish Money is set to revolutionize the fintech sector, bringing unparalleled advancements to digital payments and financial services regionally and globally. As both entities leverage their strengths and innovative technologies, the partnership will not only drive economic growth but also set a new benchmark for excellence and security in the industry.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
BlackRock Saudi Arabia and PIF have signed a non-binding letter of intent to formalize strategic collaboration, potentially allocating new funds to the BlackRock Riyadh Investment Management platform, focusing on Saudi equities.
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BlackRock Saudi Arabia and PIF today signed a non-binding letter of intent at the Saudi-U.S. Investment Forum to formalize their strategic collaboration through potential new allocations to the BlackRock Riyadh Investment Management (BRIM) platform.
Established in April 2024 with an initial investment mandate from PIF, BRIM is now operational and actively managed by BlackRock’s Riyadh-based investment teams.
Today’s announcement is a significant milestone in this collaboration, with an agreement to launch an index mandate focusing on Saudi equities. This allocation underscores PIF’s confidence in BlackRock’s capabilities and commitment to fostering a robust investment environment in KSA’s capital markets.
PIF is one of the world’s most impactful investors, enabling the creation of new sectors and opportunities that help shape the global economy, while driving the economic transformation of Saudi Arabia.
This letter of intent complements a series of PIF initiatives to promote further growth in the Saudi capital market ecosystem and enable a more robust international investment management sector based in Saudi Arabia.
This comes in addition to a Saudi systematic equities mandate launched in January 2025, marking another step towards achieving their shared goals.
The collaboration between PIF and BlackRock represents a pivotal step toward driving development goals and enhancing investment management within Saudi Arabia, bringing significant benefits to the Saudi financial landscape.
Today’s letter of intent is non-binding and is subject to satisfying certain necessary conditions including obtaining all necessary regulatory and internal approvals, and fulfilling specified milestones.
BlackRock Riyadh Investment Management (BRIM) encompasses investment strategies across a range of asset classes for the Saudi and MENA market, including both public and private markets, and is managed by a Riyadh-based investment team.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Interior designer Thomas Hamel on where it goes wrong in so many homes.
Bahrain’s non-oil imports increased by 2% in Q1 2025, with top 10 countries accounting for 71% of total import value, while exports decreased by 0.1%, with gold ingots being the top re-exported product.
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The value of Bahrain’s non-oil imports increased to BD1,527 million ($4051.55 million) in Q1 2025, a 2% rise compared to BD1,497 million for same quarter in 2024. The top 10 countries for imports recorded 71% of the total value of imports.
On the other hand, the value of non-oil of exports (National Origin) decreased by 0.1% to BD1,017 million ($2698.38 million) in Q1 2025, compared with BD1,018 million for same quarter in 2024. The top 10 countries accounted for 67% of the total export value, according to Information & eGovernment Authority’s (iGA) Q1 2025 Foreign Trade report.
Imports
According to the report, Australia ranked first for imports to Bahrain, with a total of BD224 million (15%), followed by China with BD217 million (14%) and the United Arab Emirate with BD119 million (8%).
Other Aluminum Oxide recorded as the top product imported to Bahrain with a total value of BD227 million (15%), followed by Non-Agglomerated Iron Ores and Concentrates with BD123 million (8%) and Parts for Aircraft Engines being the third with BD64 million (4%).
Exports
Saudi Arabia ranked first among countries for non-oil exports (National Origin) with BD232 million (23%). The United Arab Emirates was second with BD103 million (10%) and the US was third with BD96 million (9%).
Unwrought Aluminum Alloys recorded as the top products exported in Q1 2025 with BD272 million (27%), followed by Agglomerated Iron Ores and Concentrates Alloyed with a value of BD171 million (17%) and Aluminum Wire not Alloyed with BD50 million (5%).
Re-exports
The total value of non-oil Re-exports decreased by 1.5% to reach BD203 million during Q1 2025, compared to BD206 million for same quarter in 2024. The top 10 countries in re-exports accounted for 81% of the re-exported value.
The UAE ranked first with BD77 million (38%) followed by Saudi Arabia with BD41 million (20%) and Luxembourg with BD13 million (6%).
As per the report, Gold Ingots was the top product re-exported from Bahrain with a value of BD19 million (9%), followed by Smartphones BD17 million (8%), and Four-Wheel Drive came third with BD15 million (7%).
As for the Trade Balance, which represents the difference between exports and imports, the deficit recorded BD307 million in Q1 2025 compared to a deficit of BD273 million in Q1 2024.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Following the devastation of recent flooding, experts are urging government intervention to drive the cessation of building in areas at risk.
April’s CPI report was softer than expected, but not a turning point. Housing costs remained high, and super-core services climbed. Retail investors may support risk assets.
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April’s CPI report came in softer than expected, but we’re not ready to call it a turning point. Yes, the headline number cooled thanks largely to cheaper oil and the biggest grocery price drop since 2020 but the details are less comforting. Housing costs remained stubbornly high, and super-core services (excluding shelter) climbed. These are the sticky components that the Fed watches closely, and they’re not giving up ground easily. Retail investors are likely to view the recent data as a short-term positive which may support risk assets – especially equities and rate-sensitive sectors such as real estate and tech.
In etoro‘s though, it is still too early to judge the inflationary impact of new tariffs. The modest pass-through in April likely reflects pre-tariff inventory being cleared, not a lack of pricing power. That buffer may not last. Over the next few months, we’ll get a clearer picture of whether tariffs feed into consumer prices or trigger substitution effects and whether trade tensions end up hitting growth harder than inflation.
For now, this mixed bag validates the Fed’s cautious stance. There’s no urgency to cut, but no clear case for tightening either. Markets may cheer the softer print, but we still think that the inflation outlook remains uncertain.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Bybit and Ghaf Labs have formed a strategic partnership to promote crypto adoption, ecosystem development, and real-world utility in the Middle East and North Africa.
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Bybit, the world’s second-largest cryptocurrency exchange by trading volume, and Ghaf Labs, a MENA-based Web3 boutique advisory and consultancy firm, have signed a Memorandum of Understanding (MOU) to enter a multi-year strategic partnership. The alliance aims to drive crypto adoption, ecosystem development, and real-world utility across the Middle East and North Africa (MENA).
This partnership underscores a shared mission to position the region as a global Web3 hub by enabling innovation, supporting regulatory clarity, and fostering meaningful use cases that integrate blockchain into daily life.
Ecosystem Growth and Startup Acceleration
Ghaf Labs, backed by Ghaf Capital Partners—Dubai’s pioneering blockchain-focused private capital firm—offers tailored advisory and incubation services to Web3 ventures across MENA. With its strong regional network and regulatory insight, Ghaf Labs plays a key role in scaling blockchain projects in one of the fastest-growing digital economies.
Together, Bybit and Ghaf Labs will provide equity-free grants, startup support, and access to strategic resources for ventures exploring blockchain, AI, and sustainability—sectors central to the region’s digital transformation.
“Our partnership with Ghaf Labs is rooted in a shared vision for the MENA region — one where crypto isn’t just adopted, but lived,” said Helen Liu, COO of Bybit. “From developer tooling to lifestyle integration, we’re building the bridges that bring crypto into everyday life.”
Investing in Talent and Community
The collaboration will also launch a series of education initiatives designed to nurture local Web3 talent. These include university partnerships, bootcamps, and developer hackathons, all aimed at empowering the next generation of blockchain builders.
Additionally, both parties will co-develop educational content to improve Web3 literacy across Arabic- and English-speaking communities in the region.
“This partnership with Bybit reflects our shared commitment to advancing Web3 infrastructure, education, and institutional engagement across the MENA region. Together, we aim to accelerate innovation and continue to position the UAE as a global hub for digital assets.”
said Feras Al Sadek, Co-Founder and Managing Partner at Ghaf Labs.
Lifestyle, Payments, and Cultural Impact
Beyond development, the partnership highlights the real-world utility of crypto through lifestyle applications like the Bybit Card. This product connects digital assets with premium experiences, including exclusive access through partners such as Grand Millennium Hotels in Dubai—demonstrating the role of crypto in elevating travel, luxury, and everyday spending.
The alliance will also elevate the regional event scene, co-branding marquee events like The Crypto Polo Cup and Crypto Fight Night. These gatherings merge luxury, sport, and Web3 culture to amplify awareness and engagement.
With this MOU in place, Bybit and Ghaf Labs will jointly explore innovation funding, institutional integration, and blockchain-powered use cases across finance, hospitality, education, and beyond—contributing to a resilient Web3 infrastructure in MENA.
This strategic collaboration reinforces the UAE’s status as a forward-thinking jurisdiction and reflects Bybit’s long-term investment in the region’s digital future.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Aramco, a prominent energy and chemicals company, reported a net income of $26 billion in Q1, a 4.2% increase from Q1 2024.
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Aramco, one of the world’s leading integrated energy and chemicals companies, has announced a net income of $26 billion for the first quarter of this year (Q1), compared to $27.3 billion in Q1 2024.
The company’s robust financial performance highlights reliability, efficiency and low-cost operations, Aramco said.
Cash flow from operating activities was $31.7 billion (Q1 2024: $33.6 billion); free cash flow was $19.2 billion (Q1 2024: $22.8 billion). Gearing ratio was 5.3% as at March 31, 2025, compared to 4.5% at end of 2024.
Board declared a base dividend of $21.1 billion for Q1 2025, up 4.2% year-on-year, and performance-linked dividend of $0.2 billion, to be paid in the second quarter.
The company’s capital expenditures totaled $12.5 billion in Q1 to support long-term strategic growth, it said.
It said the Ministry of Energy announcement of new oil and gas discoveries reflects sustained advantage in exploration.
The company average realized crude oil price in the quarter was $76.3 per barrel, compared to $83 per barrel in Q1 2024 and $73.1 per barrel in Q4, 2024.
Other Q1 highlights:
* Definitive agreements to acquire 25% equity stake in Unioil Petroleum Philippines support strategic growth in downstream value chain
• Completed acquisition of 50% equity interest in Blue Hydrogen Industrial Gases Company aims to capitalize on emerging opportunities for lower-carbon energy
• Launch of CO2 Direct Air Capture pilot plant paves way for further scale up of innovative emission-reduction technology
Commenting on the results, Aramco President & CEO Amin H Nasser said:
“Global trade dynamics affected energy markets in the first quarter of 2025, with economic uncertainty impacting oil prices. In this context, Aramco’s robust financial performance once again demonstrated the Company’s unique scale, its reliability and flexibility, the value of its low-cost operations, and its emphasis on efficiency and advanced technology.
“Such periods also highlight the importance of disciplined capital planning and execution while we continue to take a long-term view. In volatile times Aramco’s resilience underpins both our financial performance and our sustainable and progressive base dividend.
“With all forms of energy key to meeting energy demand we continue to advance our growth strategy across Upstream, Downstream and New Energies, while working to reduce emissions. Our ambition is reflected in milestones already announced in 2025, including progress towards our gas production growth target, our global retail expansion, the advancement of our petrochemicals strategy, headway in blue hydrogen business development, and further innovation in carbon capture.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
The Emirates Group achieved record profits, revenue, cash assets, and EBITDA in its 2024-25 Annual Report, making it the most profitable aviation group globally, and also declared a dividend to its owner.
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The Emirates Group today released its 2024-25 Annual Report, achieving new record profit, EBITDA, revenue, and cash balance levels. This outstanding performance places the Emirates Group as the most profitable aviation group globally in the 2024-25 reporting period, with Emirates reporting the best result in its history to become the world’s most profitable airline.
Both Emirates and dnata contributed record revenues in 2024-25, as the Group expanded its operations around the world to meet voracious customer demand for its high-quality products and services.
For the financial year ended 31 March 2025, the Emirates Group reported:
- record profit before tax of AED 22.7 billion (US$ 6.2 billion), up 18% from last year
- record revenue of AED 145.4 billion (US$ 39.6 billion), up 6% over last year’s results
- record level of cash assets at AED 53.4 billion (US$ 14.6 billion), up 13% from last year
- highest-ever EBITDA of AED 42.2 billion (US$ 11.5 billion), up 6%, demonstrating its strong operating profitability
Emirates earns its place as the world’s most profitable airline, reporting:
- record profit before tax of AED 21.2 billion (US$ 5.8 billion), up 20% from last year
- record revenue of AED 127.9 billion (US$ 34.9 billion), an increase of 6% over last year
- highest-ever level of cash assets at AED 49.7 billion (US$ 13.5 billion), 16% higher compared to 31 March 2024.
dnata delivered solid growth and performance across its business units, reporting:
- record profit before tax of AED 1.6 billion (US$ 430 million), up 2% from last year
- record revenue of AED 21.1 billion (US$ 5.8 billion), up 10%
- strong cash assets of AED 3.7 billion (US$ 1.0 billion).
The Group declares a dividend of AED 6.0 billion (US$ 1.6 billion) to its owner, the Investment Corporation of Dubai (ICD).
This is the first financial year that the UAE corporate tax, enacted in 2023, is applied to the Emirates Group. After accounting for the 9% tax charge, the Group’s profit after tax is AED 20.5 billion (US$ 5.6 billion).
His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates airline and Group said: “It is no accident that Dubai has produced hugely successful global aviation entities including Emirates and dnata. Dubai’s aviation sector has become an influential force on the global stage thanks to visionary leaders, strategic planning, coordinated execution, and strong support from our customers, business partners, and all the people of Dubai.
“When the government set up Emirates 40 years ago and we began expanding dnata’s capabilities to support the city’s growth, we had a clear mission – be the best at what we do; and deliver value to Dubai, our stakeholders, and the communities we serve.
“With that in mind, we’ve kept a laser focus on providing great products and services, and we continually invest in technology and talent to increase our competitive edge. We look after our people and our customers, and we work hard to positively impact our communities. We don’t cut corners, and we don’t take shortcuts that put our future at risk for short term gains. By building our business models around these principles and Dubai’s unique strengths, the Emirates Group has thrived and stayed resilient through geo-political and socio-economic challenges over the years.”
HH Sheikh Ahmed added: “For 2024-25, the Emirates Group has raised the bar to set new records for profit, revenue, and cash assets. Through the year, Emirates and dnata were able to move quickly to meet the strong demand for air transport services across markets and win over customers – thanks to our non-stop investments in our people, in building partnerships, and in delivering great products and services.
“I’d like to thank our amazing people at the Emirates Group for achieving another record year, and our customers and partners for their trust and support. My gratitude to Dubai’s visionary leaders HH Sheikh Mohammed bin Rashid Al Maktoum, and his sons HH Sheikh Hamdan and HH Sheikh Maktoum, for their continued leadership and stewardship of Dubai’s strategy, in which the Emirates Group is proud to play a key role.”
In 2024-25, the Group collectively invested AED 14.0 billion (US$ 3.8 billion) in new aircraft, facilities, equipment, companies, and the latest technologies to support its growth plans.
The Group’s total workforce grew by 9% to 121,223 employees, its largest size ever, as Emirates and dnata continued recruitment activity around the world to support its expanding operations and boost its future capabilities.
Commenting on the outlook for 2025-26, Sheikh Ahmed said: “We enter the year ahead with excitement and optimism. Our excellent financial standing enables us to continue building on and scaling up from our successful business models. While some markets are jittery about trade and travel restrictions, volatility is not new in our industry. We simply adapt and navigate around these challenges.
“Emirates will strengthen our network connectivity with the expected delivery of 16 A350s and 4 Boeing 777 freighters in 2025-26, providing much-needed capacity to meet customer demand. Our retrofit program will continue apace to provide our customers the latest Emirates products and a more consistent experience across our A380, 777 and A350 fleet.
“dnata is on a steady growth path with facility investments coming to fruition in key markets, including the opening of new facilities in Amsterdam, Dubai and Erbil next year which will significantly expand our cargo handling capacity and capabilities.
“Work is already underway at the new Al Maktoum International airport (DWC) and broader development around Dubai South. Our planning teams are working closely with Dubai airports and other entities to design and deliver the future of aviation and the best possible travel experiences.
“We’ve set high targets for ourselves, but I am confident that our talented workforce and Dubai’s winning formula will empower the Emirates Group to forge an even brighter future, and deliver even more value to the people, cities and communities we serve.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Dubai Investments PJSC saw a 52% increase in Q1 2025 profit before tax, attributed to its strategic vision and diversified portfolio, focusing on real estate.
2 min
Dubai Investments PJSC, the leading diversified investment company listed on the Dubai Financial Market, reported profit before tax of AED 185 million for the three-month period ended March 31, 2025, representing a 52% increase compared to AED 122 million during the same period last year.
The profit growth is primarily driven by higher rental income underpinned by stable occupancy levels under the property segment.
Capitalizing on this positive trajectory, the Group delivered a solid overall performance in Q1 2025, with total income rising to AED 823 million, up from AED 792 million in the same period last year. As of March 31, 2025, total assets grew to AED 22.27 billion as compared to AED 22.10 billion as of 31st December 2024.
Khalid Bin Kalban, Vice Chairman and CEO of Dubai Investments, commented: “Dubai Investments’ strong performance in Q1 2025 is a clear reflection of the Group’s strategic vision and the resilience of its diversified portfolio. The real estate sector continues to be a significant driver of the Group’s profitability, and Dubai Investments expects this momentum to continue given the strong real estate demand in the UAE. As a Group, Dubai Investments is committed to growth within the real estate sector while also focusing on other business verticals to meet industry demands and achieve sustainable growth.”
Building on this strong start to the year, Dubai Investments is poised to accelerate growth in the real estate sector through the delivery of key projects and strategic expansions. The upcoming handover of the first phase of Danah Bay on Al Marjan Island, Ras Al Khaimah, the continued progress of Violet Tower at Jumeirah Village Circle, in Dubai slated for completion in Q4 2026, and the recent launch of Asayel Avenue as part of the Mirdif Hills project in Dubai, underscores the Group’s commitment to delivering high-quality, mixed-use developments. The growth of Al Mal Capital REIT also remains central, reinforcing its role as a steady source of dividend income. With developments advancing on schedule and new projects in the pipeline, Dubai Investments is actively consolidating its position in the real estate space. In parallel, the Group is exploring opportunities across other verticals to diversify its income streams, enhance market presence, and deliver long-term, sustainable returns.
Dubai Investments PJSC
Dubai Investments is a publicly listed UAE based multi-asset investment Group, managing a diverse portfolio of businesses, generating sustainable financial returns to its shareholders. Established in 1995, Dubai Investments is one of the leading investments Group in the UAE, initiating new businesses and partnering with dynamic entities, creating strategic investment opportunities across the region. With 15,956 shareholders, a paid-up capital of Dhs. 4.25 billion and total assets worth more than Dhs. 22 billion, the Group applies insight and experience to expand and be a reliable growth driver for businesses within sectors like real estate, manufacturing, healthcare, education, investments and services. The Group’s diverse portfolio consists of wholly and partly owned companies and reflects the Company’s continued focus on business diversification to drive growth in line with evolving industry trends.
Focused on leveraging strengths with an interest in establishing existing and new business opportunities with a long-term, strategic and creative approach and with an emphasis on sustainable returns and capital growth, Dubai Investments collaborates on investment strategies meeting the changing needs of the economy and the societies in which it operates. Complementing the strategic objectives and creating value for stakeholders, the Group pursues growth through mergers and acquisitions and business expansions.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
The Abu Dhabi Chamber of Commerce & Industry (ADCCI) held the Abu Dhabi-Japan Business Connect Forum in Tokyo to promote economic growth and investment opportunities.
2 min
In line with efforts to strengthen cross-border partnerships and drive economic growth, the Abu Dhabi Chamber of Commerce & Industry (ADCCI) hosted public and private sector leaders at the Abu Dhabi–Japan Business Connect Forum in Tokyo in presence of the UAE Ambassador to Japan, H.E. Shihab Al Faheem to explore key investment opportunities and exchange ideas on advancing sustainable development and innovation.
Addressing the Forum, His Excellency Ahmed Jasim Al Zaabi, Chairman of ADCCI, said: “Japan has played a pivotal role in shaping our development, from urban planning to industrial growth, and it remains one of our top trading partners.” H.E. noted that UAE’s trade with Japan has grown at a compound annual growth rate (CAGR) of 11.9% over the past five years. During the same period, the UAE’s investments in Japan more than doubled, while the country attracted over 80 percent of all Japanese investments in the Middle East.
H.E. added: “Our advanced infrastructure, business-friendly ecosystem, smart city and quality of life initiatives have helped us attract global talent, entrepreneurs, and investors. Trade has been a key enabler of this economic growth,” pointing to Abu Dhabi’s strong track record in economic diversification. H.E. noted that non-oil trade rose by 9% in 2024, while non-oil exports surged by 86.4% during the same period.
H.E. also emphasized the importance of regulatory reforms, improved ease of doing business, and seamless digital integration to global business, while working closely with Japan to build a future that empowers economies, enriches societies, and inspires future generations.
During the event, ADCCI and the Japan External Trade Organization (JETRO) signed a Memorandum of Understanding (MOU) to deepen business relations and create new opportunities for collaboration between Abu Dhabi and Japan, reinforcing a shared vision for promoting long-term trade and sustainable growth, particularly in innovation, sustainability, and advanced technologies.
The MOU was signed by H.E. Shamis Al Dhaheri, Second Vice Chairman and Managing Director of ADCCI, and Nobuyuki Nakajima, Managing Director of JETRO MENA, in the presence of the UAE Ambassador to Japan, H.E. Shihab Al Faheem — marking the start of a new phase of collaboration.
H.E. Shamis said: ” The MOU with JETRO marks a key step in deepening economic ties between Abu Dhabi and Japan, while the forum provides a valuable platform to drive investment, foster innovation, and build sustainable partnerships across key industries. By aligning around our shared values — growth, sustainability, and technological progress — we are not only unlocking new business opportunities, but also contributing to a more connected and prosperous global economy.”
Mr. Nakajima echoed the sentiment, adding: “This is a significant milestone in enhancing the economic partnership between Japan and the UAE. Japan is committed to expanding its collaboration with the UAE, and this offers an invaluable opportunity to explore new investment avenues and foster mutually beneficial business relationships. As both nations focus on innovation, sustainability, and digital transformation, we are confident that this event will pave the way for groundbreaking partnerships that will shape the future of both our economies.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Gold, a safe haven, holds value during volatile periods and has a low correlation with traditional assets. Bitcoin, also known as digital gold, is becoming a popular store of value and hedge against fiat currency debasement. However, Bitcoin’s price appreciation outpaces inflation, making it a less consistent hedge than gold.
2 min
When markets turn gloomy, gold often shines. Investors call gold a “safe haven” because it tends to hold its value, or even increase, during uncertain or volatile periods. Gold has historically had a low or negative correlation with traditional assets like stocks and bonds. That means when stocks are falling, gold often outperforms, helping cushion portfolio losses. This diversification benefit is one of the key reasons why gold is often suggested as part of a balanced portfolio.
In recent years, a new contender has entered the scene: Bitcoin. Often dubbed “digital gold,” Bitcoin has attracted a following of investors who see it as the modern equivalent of gold—a store of value and hedge against fiat currency debasement. Both gold and Bitcoin share some similarities: neither is tied to a company’s earnings or bond interest payments, and both have limited supplies (gold by nature, Bitcoin by code).
The first major difference between them is volatility. Gold has earned its safe-haven reputation over centuries, whereas Bitcoin is still arguably in its infancy and has behaved more like a high-risk asset throughout its history. If your primary aim is portfolio insurance and stability during crises, gold’s long history and lower volatility make it the more reliable choice. Bitcoin is more of a speculative diversifier; it might play a role in a portfolio, but it’s not a proven safe haven in the way gold is.
As institutional adoption grows and regulatory clarity improves, bitcoin and crypto are gradually alleviating their purely speculative image and growing toward mainstream acceptance as assets that deserve a place in investment portfolios.
This built-in scarcity underpins the idea that Bitcoin should hold its value when inflation erodes the purchasing power of dollars. Over the past decade, Bitcoin’s price appreciation has well outpaced inflation. However, in 2022, when inflation in the U.S. and Europe hit decade highs, bitcoin’s price fell 65% for the year, even as gold stayed roughly flat. At the same time, bitcoin has also outperformed gold, but not without its ups and downs, which aren’t for the faint-hearted.
Some younger investors with a high-risk tolerance and long-time horizon might favor Bitcoin or high-growth stocks as their “alternative” asset and skip gold entirely. In my experience, the question of gold in a portfolio often comes down to this: Does it help you stay disciplined and calm? If knowing you have a bit of gold helps you not panic-sell your stocks in a downturn because you see something in your portfolio holding value, then gold is doing its job.
For now, investors see it bitcoin as a long-term store of value, not a safe haven. Bitcoin is a promising but still maturing asset, and a small allocation has proven that it can increase gains in a portfolio, but with a high level of volatility. However, it still falls short of the consistency that traditional hedges like gold offer.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
The UAE FTA has decided to exempt certain corporate taxpayers from administrative penalties for late registration applications, requiring them to submit returns within seven months of their first tax period.
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The Federal Tax Authority has today announced that it has begun implementing the UAE Cabinet Decision to exempt certain corporate taxpayers from administrative penalties resulting from the late submission of registration applications, within the specified deadline.
To qualify for the waiver of the penalty, the taxable person (or exempted categories) must submit their Tax Return (or Annual Declaration) within a period not exceeding seven (7) months from the end of their first Tax Period (or first Financial Year), instead of nine months.
The FTA further clarified that the exceptional condition for benefiting from the exemption by submitting the tax return (or the annual declaration) within a period not exceeding seven (7) months from the end of the tax period, applies only to the first tax period of the taxable person (or the exempt person required to register). This is regardless of whether the due date for submitting the first tax return (or first annual declaration) falls before or after the implementation of the new decision.
The Authority added that if a taxable person has paid the administrative penalty for late submission of the corporate tax registration application and meets the conditions for benefiting from the exemption, the paid penalty will be refunded, and the amount will be credited to the taxable person’s account with the Authority.
Likewise, registered persons who submitted their tax returns before the implementation of the exemption decision and were subject to a late submission penalty will also be exempted, and any penalties already paid will be credited back to their accounts with the Authority.
Commenting on the announcement, Khalid Ali Al Bustani, Director-General of the FTA, called on all unregistered corporate taxpayers to expedite the submission of corporate tax registration applications and tax returns via EmaraTax. He added that submissions should be made within the period specified by the Cabinet Decision to take advantage of the exemption.
Aligned to the Cabinet Decision, FTA’s core strategy has been structured around expediting tax procedures for all business sectors and to encourage voluntary compliance with tax laws.
“Widespread compliance is a key and contributing element in promoting economic growth and the FTA remains committed to full transparency in relation to a flexible and constantly updating tax legislative environment,” he said.
Praising the high turnout of corporate tax registrations during the first quarter of 2025, he also revealed that the number of corporate tax registrations now exceeded 543,000. This reflects the growing awareness among business sectors of the importance of complying with tax procedures.
“The FTA is keen to continue communicating with all categories of business sectors through various awareness channels to help familiarise them with compliance procedures, explore their views, and formulate methods to overcome any challenges they may face,” he added.
Regarding the cases to which the exemption applies and how to benefit from the initiative, the FTA explained that, in general, the exemption applies to all persons subject to registration for corporate tax, regardless of whether the taxpayer applied for registration and was subject to an administrative fine for delaying registration within the specified deadline, or did not apply for registration.
The legal conditions for exemption are:
* If the taxpayer (or exempt person required to register) has been registered, but has been charged a late penalty and has not paid it, he or she must file the return (or annual return) within seven (7) months of the end of the first tax period (or first Financial Year) in order to be exempt from the delay penalty.
* If a taxpayer (or an exempt person who is required to register) has been registered, a late penalty has been imposed and paid, the taxpayer must file the return (or annual return) within seven (7) months of the end of the first tax period to be exempt from the late penalty. The amount paid will then be refunded to the taxpayer’s account.
* If a taxpayer’s registration application has not been submitted. In that case, the taxpayer (or exempt person required to register) must expedite the registration application and then submit the tax return (or annual declaration) within seven (7) months of the end of the first tax period or first financial year to be exempt from the late penalty.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Bitcoin nears $100,000 milestone, with neutral Crypto Fear and Greed Index, high institutional inflows, upcoming US Federal Reserve meeting, Ethereum upgrade, and 185% surge in PENGU.
2 min
Bitcoin is once again approaching its milestone price of $100,000, following a breakout from a consolidation phase around the $95,000 level. Last week, Bitcoin reached as high as $98,000, marking its highest price since mid-February. While the price has seen a slight pullback since then, the continued uptrend signals potential for another climb toward the $100,000 mark.
Simon Peters, Crypto Analyst at eToro, commented: “The $100K level is particularly significant for Bitcoin. Historically, it has acted as a strong resistance level. We saw substantial selling pressure when Bitcoin first reached $100,000 in November 2024, with the price quickly dropping to $90,000. Whether we will see a similar price action this time remains to be seen. However, the current sentiment and market dynamics provide some indications that Bitcoin may continue its rise.”
The Crypto Fear and Greed Index is currently above neutral, indicating that the market is not yet overbought, leaving room for further upward movement. Bitcoin’s price typically faces significant sell-offs when investor sentiment is dominated by “greed,” but the current index suggests that the market has not yet reached that level.
Additionally, institutional inflows into Bitcoin, reflected in the activity of spot ETFs, have been above average in the past week. Large whale investors and Bitcoin treasury companies are continuing to accumulate, signaling strong confidence in the market.
Federal Reserve Meeting and Interest Rate Decision
The upcoming interest rate decision and press conference from the U.S. Federal Reserve on Wednesday could provide further tailwinds to Bitcoin’s price. Recent data, including the Personal Consumption Expenditures (PCE) index and non-farm payrolls report, have reassured investors that inflation is slowing down and the labor market remains robust. The market will closely watch for any signals from Chairman Jerome Powell about potential rate cuts in June, which could positively affect Bitcoin and other cryptocurrency prices.
Ethereum ‘Pectra’ Upgrade
Ethereum’s upcoming upgrade, Pectra, is set to go live this Wednesday and is poised to enhance the scalability, usability, and efficiency of the network. The upgrade will also raise the staking limits for Ethereum validators from 32 ETH to 2,048 ETH, potentially locking up more supply and increasing the demand for Ether. This development comes at a crucial time for Ethereum, as its market dominance has recently dropped to 7%, the lowest level since September 2019.
The Pectra upgrade could drive more activity on the Ethereum network, creating upward pressure on Ether’s price and potentially increasing its market capitalization.
Biggest Movers: PENGU Soars 25%One of the biggest movers in the crypto space last week was PENGU, which saw a significant 25% price increase. The token, which is the official ecosystem currency of Pudgy Penguins, a popular collection of 8,888 unique NFTs, has surged 185% since hitting a low of $0.003715 on April 9th.
Eye-Catching Stories: Major Finance Platforms Enter Crypto
In a notable development for the crypto industry, Charles Schwab announced plans to launch spot cryptocurrency trading on its platform within the next 12 months. Initially, trading will focus on Bitcoin and Ethereum and will be available through Schwab’s think or swim platform before expanding to schwab.com and mobile apps.
Similarly, Morgan Stanley revealed plans to offer crypto trading services to its E-Trade clients within the next year. As more traditional financial institutions introduce crypto trading services, this may further legitimize the market and contribute to future price growth for Bitcoin and other cryptocurrencies.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Alexandre de Betak and his wife are focusing on their most personal project yet.
Arab Developers Holding plans to invest EGP 3.25 billion in the Egyptian real estate sector in 2025, doubling its 2024 investment. The majority will be used for residential and mixed-use projects, aiming for 3,000 units.
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Arab Developers Holding has unveiled an ambitious investment plan for 2025, aiming to inject EGP 3.25 billion into the Egyptian real estate sector—nearly double the EGP 1.7 billion invested in 2024. The announcement was made through a bourse disclosure on April 30th, signaling the company’s confidence in market growth and its commitment to accelerating project development.
The bulk of the 2025 investment will be allocated toward the ongoing construction of the company’s current portfolio of residential and mixed-use projects. This move aligns with Arab Developers’ strategy to enhance delivery timelines and capitalize on increasing demand for quality housing and integrated communities in Egypt.
As part of its 2025 goals, the company plans to deliver approximately 3,000 residential units across its various developments. It is also targeting contractual sales of EGP 7.6 billion, a significant increase from the EGP 4.6 billion achieved in 2024—underscoring strong market demand and a robust sales pipeline.
Despite challenging economic conditions, Arab Developers Holding remains focused on long-term growth. The EGX-listed company reported consolidated net profits attributable to the parent company of EGP 92.47 million in 2024, reflecting a 6.08% year-on-year decline. However, the planned surge in investments and delivery volume suggests a proactive approach to driving revenue growth and shareholder value in the coming year.
By doubling down on construction progress, boosting unit handovers, and expanding sales, Arab Developers Holding is positioning itself as a key player in Egypt’s evolving real estate landscape.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Sydney’s prestige market is looking up, here’s three of the best on the market right now.
The Kuwait Financial Centre’s April 2025 report reveals the equity market as the top performer among GCC markets, but negative due to trade tensions and oil prices. Consumer staples and real estate saw gains.
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Kuwait Financial Centre “Markaz” released its Monthly Market Review report for April 2025. Kuwait equity market continues to be the top performer among GCC markets on year-to-date basis as of April 2025. However, during April, Kuwait markets were negative, in line with many global and regional markets. Kuwait’s All Share Index declined by 1.4% amid concerns over impact of trade tensions on economic outlook and oil prices. Consumer staples and real estate were the top gainers, rising by 6.3% and 4.9% respectively. The banking sector index declined by 1.9% for the month. Among Premier Market stocks, Gulf Cables and Kuwait Real Estate Company were the top gainers, rising by 12.5% and 11.2% respectively. Gulf Cables announced that its subsidiary, Gulf Cable and Multi Industries Company has been awarded a tender for supplying copper and aluminum cables to Jordan Electric Power Company to the tune of KD 3.95 million (USD 12.91 million). This is likely to improve operational profit by 5% to 7% in 2025. Kuwait Real Estate Company had reported an 18.9% y/y increase in net profit in FY 2024 driven revaluation gains on investment properties. Its net rental income has also grown by 9.4% y/y amid strong demand and high occupancy levels.
IMF has lowered its estimate for Kuwait’s real GDP growth in April 2025 to 1.9% down from its December 2024 estimate of 2.6%, due to delayed unwinding of production cuts during the year. OPEC+ began unwinding production cuts in April 2025, while it had initially planned to start in October 2024. However, OPEC+ has announced plans to further increase its production in May 2025. According to the new plan, Kuwait would be producing 2.443 million bpd, up from the earlier planned 2.428 million bpd. Kuwait has initiated merger of two of its state-owned oil firms, Kuwait National Petroleum Company (KNPC) and Kuwait Integrated Petroleum Industries Company (KIPIC), as the country plans to restructure its energy industry.
The S&P GCC Composite index declined by 1.0% in April 2025 with mixed performance across GCC markets, pressured by trade war concerns and the decline in oil prices. As part of its levy of tariffs on imports from countries across the World, the U.S has also levied a 10% blanket tariff on imports from GCC, effective from April 5. Saudi equity index declined by 2.9% during the month, even as positive earnings lent some support. ACWA Power and Saudi Aramco had declined by 6.2% and 5.2% respectively for the month. Saudi Telecom gained 5.0% for the month supported by 11% y/y increase in its net profit for Q1 2025.
Abu Dhabi’s equity index increased by 1.8% in April 2025, supported by gains in blue chips. First Abu Dhabi Bank gained 8.7% for the month on the back of major restructuring of its executive committee. Dubai’s equity index gained 4.1% for the month, supported by real estate and banking stocks. Dubai Islamic Bank gained 5.4% for the month, as its net profit increased by 8% y/y in Q1 2025 on the back of growth in quality earning assets. Qatar’s equity markets gained 2.2% for the month supported by positive earnings.
IMF has lowered Saudi Arabia’s GDP growth for 2025 to 3.0%, down from 3.3% in January 2025 amid decline in oil prices and rising global risks. UAE is expected to grow by 4.0% in 2025, down from an earlier estimate of 5.1%. S&P has downgraded Bahrain’s outlook to negative from stable citing elevated fiscal deficits amid lower oil prices, maintenance at the Abu Sa’fah oil field, impact of market volatility on funding costs and higher social spending.
Global markets were mixed during April 2025. The MSCI World index was slightly positive while the S&P 500 index declined by 0.8% for the month. Earlier in the month, U.S equities declined steeply on the back of Trump administration’s announcement of a broad range of higher-than-expected tariffs as they fueled concerns over economic slowdown and resurgence of inflation. U.S had levied 145% tariffs on most Chinese goods and Beijing had retaliated with 125% levies on U.S. imports. U.S has also levied a 10% baseline tariff on almost all imports to the U.S. However, subsequent announcement of a 90-day pause on the reciprocal tariffs for most countries to allow time for negotiations and possible de-escalation of trade tensions between U.S and China have helped markets recover some of the losses.
Nasdaq 100 gained 1.5% during the month, supported by better-than-expected earnings from tech stocks. IMF has lowered its global growth estimate for 2025 to 2.8%, down from 3.3% in January. The MSCI EM index gained 1.0% during the month supported by 3.7% rise in Indian equities. Chinese equities declined by 1.7% during the month due to trade tensions even as hopes of stimulus lent some support to the markets. While Indian equities had also been weighed down by concerns over levy of tariffs in the earlier part of the month but later recovered.
U.S inflation stood at 2.4% y/y in March 2025, declining from the 2.8% y/y reading in February 2025 due to decline in energy prices. The U.S labor market added 228,000 jobs in March, up from 117,000 jobs added in February. Job gains were supported by job gains in sectors such as healthcare, retail, transportation and construction.
The yield on the 10-year US treasury notes remained volatile during the month, declining by 6 bps for the month to 4.17%. Earlier in the month, amid concerns over high inflation and lower growth due to tariff tensions, 10-year yields had risen to about 4.48%. Subsequently, yields trended lower later in the month on hopes of easing trade tensions.
Oil (Brent) prices closed the month at USD 63.1 per barrel, down 15.5% during the month. The commodity reached a four-year low during the month, weighed by OPEC+’s decision to increase oil production and trade tensions. OPEC+ has decided to raise output by 411,000 bpd in May 2025, up from the earlier announced hike of 135,000 bpd citing healthy market fundamentals and the positive market outlook. However, output cut plans for some OPEC+ members, U.S sanctions targeting Iranian oil exports and optimism over U.S-EU trade deal aided in stemming decline in oil prices. OPEC+ has also announced updated output cut plans for 7 countries including Iraq, Kazakhstan etc. who have pumped above their agreed quotas. Gold prices closed at USD 3,287, gaining 5.3% during the month and 25.3% so far this year as the commodity continued to benefit from safe-haven demand and Central Bank buying amid trade tensions.
Persisting trade tensions amid levy of tariffs by U.S and retaliatory tariffs by countries like China has increased concerns over global growth and inflation outlook. This is likely to continue to impact global markets. However, pause in levy of reciprocal tariffs by U.S, E.U-U.S tariff negotiations offer some cause for optimism. While trade tensions and lower oil prices might dampen investor sentiment in GCC, positive outlook on corporate earnings, uptick in non-oil economic activity and continued implementation of reforms are likely to provide some support to markets.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
GASTAT has revised Saudi Arabia’s GDP to improve accuracy and transparency, incorporating emerging sectors like fintech, logistics, sports, creative economy, and entertainment, aligning with Saudi Vision 2030’s economic diversification objectives.
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Minister of Economy and Planning and Chairman of the General Authority for Statistics (GASTAT), Faisal Al-Ibrahim, announced that the newly released update to Saudi Arabia’s Gross Domestic Product (GDP) marks a major strategic milestone in the Kingdom’s economic transformation.
The comprehensive revision, conducted by GASTAT, enhances the accuracy and transparency of national economic data and reflects international best practices. It enables better measurement of emerging sectors such as fintech, logistics, sports, the creative economy, and entertainment.
“The updated GDP measurement reflects the Kingdom’s ongoing transformation and the momentum of economic diversification,” Al-Ibrahim said.
“Improved coverage of high-growth sectors allows for a more accurate economic picture and strengthens the case for targeted policy and investment decisions.”
The revision revealed that non-oil activities now account for 53.2% of GDP — a 5.7 percentage point increase from earlier estimates — underscoring the expanding role of non-oil sectors in the economy. In the first quarter of 2025 alone, non-oil activities grew by 4.2%.
The update was based on extensive fieldwork and administrative data, including visits to 2.4 million sites, 122,000 households, and more than 880,000 agricultural holdings. It also involved over 60 administrative data sources and expanded the classification of economic activities from 85 to 134 categories.
Notable growth was recorded in key sectors: construction surged by 61%, wholesale and retail trade, restaurants, and hotels by 29.8%, and transportation, storage, and communications by 25.6%.
Al-Ibrahim emphasized that these changes align with Saudi Vision 2030’s objectives to diversify the economy, strengthen private sector participation, and enhance the Kingdom’s global competitiveness.
“The Kingdom’s economic outlook is positive, driven by structural reforms, strategic projects, and improved data systems. Regular updates to our statistics are vital to ensuring accurate, transparent information for policymakers, investors, and the broader public,” he concluded.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Self-tracking has moved beyond professional athletes and data geeks.
