Gulf

1. Gulf-Israel tensions
2. Mubadala, PIF’s fintech bet
3. New UAE AI model
4. Bahrain seeks sea metals
5. Do US alliances matter?

A shakeup in Saudi’s military industrial complex, and other weekend reads.

Gulf hardens stance against Israel

Monday marks the five-year anniversary of the Abraham Accords, though it’s unlikely to be a moment of celebration in the Gulf.

Israel’s attack on Hamas negotiators in Doha has brought the region together in its criticism of the country. UAE President Sheikh Mohamed Bin Zayed visited the Qatari emir on Wednesday, and a day later, Qatar’s leader attended funeral prayers for those killed in the strike. His foreign minister questioned whether Israel’s plan to “redraw” the map of the Middle East also applied to the Gulf.

Bloomberg, citing analysts and diplomats, reported that the attack undermined US President Donald Trump’s strategy of weakening Iran by integrating Israel into the region. It may even push Gulf states closer to Tehran, “rejecting what they see as an increasingly hegemonic Israel, whose aggressive military posture they believe will destabilize the region.”

For now, Gulf reactions have been mostly verbal posturing. But there’s a growing chill: Israeli companies — welcomed at the Dubai Air Show two years ago — were this week barred from the event’s upcoming edition.

Sovereign investors back fintech fund

The amount that VentureSouq targeted for its second fintech fund. The Middle East venture capital firm closed the vehicle with backing from Abu Dhabi sovereign wealth fund Mubadala and a unit of Saudi Arabia’s Public Investment Fund. The fund will focus on early stage investments in areas including digital payments, insurance tech, and alternative credit. Its previously backed startups include payments company Tabby, which was valued at $3.3 billion in its last funding round.

Governments in the Gulf have been pouring money into VC funds and tech startups in the hope of promoting economic diversification and creating jobs: Venture capital deals in the Middle East and North Africa raised $337.5 million in August, up 74% compared to a year earlier, but still a steep fall from the previous month, according to startup data platform Wamda.

Abu Dhabi AI prizes efficiency

Small but mighty. This is the brand of AI emerging from Abu Dhabi, as the UAE capital released K2 Think, a new reasoning model, this week. Its developers say it rivals technology from market leaders OpenAI and DeepSeek on some tasks, and is more efficient with using computing power to come up with answers.

The model was developed by Abu Dhabi-backed AI conglomerate G42 and Mohamed bin Zayed University of Artificial Intelligence, using silicon and inferencing from American chipmaker Cerebras — which counts G42 as a shareholder and top customer. K2 Think is free to use, and like previous AI models from Abu Dhabi, has been made completely open source, meaning other developers and researchers can study and reproduce it.

World Trade Organization Director-General Dr. Ngozi Okonjo-Iweala will join the stage at The Next 3 Billion — the premier US summit focused on closing the global digital divide. Semafor editors will sit down with global executives and thought leaders to highlight the economic, social, and global impact of bringing the next three billion people online.

Sept. 24, 2025 | New York City | Delegate Application →

Bahrain bets on deep-sea metals

Bahrain has backed a US company’s bid to mine in international waters in the Pacific for metals used in electric vehicles and electronics. It is the first country in the region to sponsor such a permit, as Manama looks for new revenue sources while managing one of the Gulf’s heaviest debt loads — 141% of GDP, according to the IMF.

Bahrain hasn’t invested in Impossible Metals but may fund a refinery in the future, Reuters reported. For now, its role is limited to state sponsorship to give Impossible Metals Bahrain the right to canvas the area and deploy robots that collect manganese, copper, and nickel nodules. Environmental groups warn of ecosystem damage, but the company says it uses artificial intelligence to reduce impact.

View: Gulf questions US credibility

The biggest question after the Sept. 9 strike in Gulf capitals is not about Israel: It’s about whether America can still be depended on for security guarantees, Faisal J. Abbas, the Editor-in-Chief of Arab News, writes in a Semafor column.

“The strike in Doha was more than a military action. It was a message,” Abbas wrote. “Trump said he wasn’t “thrilled” with what had happened, but in politics, actions speak louder than words. And in this case, not taking decisive action to curb Israel when it attacks a fellow ally would be interpreted negatively.”

Checking In

• Wynn Resorts plans to expand to Abu Dhabi after it opens the UAE’s first casino in Ras Al Khaihmeh in 2027. — AGBI

Commodities

• Saudi Arabia will gift 1.6 million barrels of crude oil to Syria as the country works to bring refineries to peak production. — Arab News

Energy

• ADNOC is transferring equity stakes in its listed companies to its strategic investment arm XRG. Among the holdings are drilling and gas, as well as chemicals firm Fertiglobe.
  

• As the Abraham Accords remain resilient in wartime, analyst David Makovsky examines the role of tradeoffs in past diplomatic breakthroughs in a piece for the Washington Institute for Near East Policy.
• Critical minerals are proving to be common ground for the Gulf and Australia, making way for a new investment corridor — and a possible counterweight to China, writes geopolitical consultant Jesse Marks for the Australian Institute of International Affairs.
• What was the significance of the August shakeup of Saudi Arabia’s defense establishment? Al-Monitor’s Francesco Schiavi points to the growing influence of Prince Khalid bin Salman, defense minister and younger brother to Crown Prince Mohammed bin Salman.