Gulf

1. PIF writes a reality check
2. Dubai eyes reusable rockets
3. Vacancies plague Oman
4. Cribbing Israel’s AI playbook
5. Seoul searching in the Gulf
6. Al Hilal defeats Man City

No more running out for a pack.

PIF passes $1 trillion and faces reality

Saudi Arabia’s Public Investment Fund now manages more than $1 trillion in assets for the first time, even as profits have plunged and costs for the kingdom’s ambitious projects have surged. Joining the illustrious club shows that PIF remains “one of the boldest institutional experiments in sovereign finance,” fund tracker Global SWF noted.

Yet underlying the headline figure, unveiled in PIF’s annual report, are signs of Riyadh’s shifting priorities. As Vision 2030 nears its 10-year mark, projects like NEOM and The Red Sea Project remain illiquid. They are now on tighter budgets and longer timelines. A third consecutive annual fall in foreign investment has also meant PIF is footing more of the bill than originally intended.

“You can’t defy gravity forever, especially when interest rates are high, oil prices are middling, and foreign capital is wary,” Global SWF said, characterizing PIF’s evolution as moving “from grandiose to grounded.” Indeed, there are signs that the kingdom’s support of its mature, operational businesses is paying off, which may prove critical to threading the post-oil needle. Esports company Savvy Games, aircraft lessor AviLease, telecom firm STC, and mining giant Ma’aden, as well as dividend earnings from Saudi National Bank, helped boost 2024 revenues 25%.

Dubai lures new SpaceX challenger

The UAE will be home to a new, plucky challenger to SpaceX. Luxembourg-based Aspire Space will move its headquarters to Dubai, where it will work with rocket engine startup Leap 71 to build a reusable spaceship it aims to launch by 2030, The National reported. A launch site has yet to be finalized, but Oman’s Etlaq spaceport is a candidate.

The UAE has previously sent astronauts to the International Space Station and its Hope probe reached Mars in 2021. Like any good space program, it has had its setbacks too: The Rashid lunar rover was lost when the spacecraft carrying it crash-landed on the Moon in 2023.

Oman landlords feel the squeeze

A glut of over half a million vacant units — 40% of them in Muscat — is worrying Oman’s landlords. Years of cheap credit and aggressive construction pushed mortgage lending up 6% in the first quarter of this year, but with demand lagging, owners are struggling to fulfil loan obligations, AGBI reported. Banks have already repossessed 240 properties. Another 60,000 units are expected to hit the market, raising concerns that more foreclosures could drive prices down further.

View: Israel has AI lessons for Saudi

Saudi Arabia can’t spend its way to AI leadership, and must build a culture of innovation, attract top talent, and — controversially for now — consider partnerships with Israeli tech firms, Jon Medved, founder of Jerusalem-based venture investment platform OurCrowd, writes in a Semafor column.

“Israel’s unique ecosystem attracts billions of dollars required to build AI technology and produce global startups,” Medved wrote. “It has become a global tech leader not by leaning on oil or sovereign wealth, but by cultivating risk-taking, dual-use innovation, and a culture of entrepreneurship.”

Riyadh seeks out Korean SMEs

Saudi Arabia is on a search in South Korea for promising businesses. The kingdom is looking to attract small- and medium-sized enterprises in AI, health care, smart city construction, and tourism, while making it easier for them to establish an outpost in the Gulf.

The two countries have established a joint $160 million fund to identify and support as many as 27 small businesses and startups from Asia’s fourth-largest economy to locate in the kingdom.

The selected companies will visit Saudi Arabia in September to meet government agencies and other potential partners and clients. Korean giants like Hyundai and Samsung are well-established in Saudi Arabia — the kingdom has plans to manufacture Hyundai cars — but their smaller peers have struggled to gain a foothold.

Al Hilal upsets Man City

Saudi football club Al Hilal pulled off a stunning upset of the English Premier League giants Manchester City in the Club World Cup. The shock victory, thanks to an extra-time goal, propelled the team to the quarterfinals of the tournament, where they will play Brazil’s Fluminense on Friday.

The tournament, hosted by the US, has thus far largely been characterized by low levels of fan attendance and extreme heat that has resulted in a players’ union warning of the risk to players as temperatures surge. Yet it has also showcased the growing role of non-Western clubs, and backers, in the sport: Manchester City is owned by the UAE’s Sheikh Mansour bin Zayed, and earlier in the tournament played against Al Ain — owned by his older brother, the UAE’s President Sheikh Mohamed bin Zayed.

Aviation

• The skies over the UAE have been busy this week: Abu Dhabi is testing the delivery of parcels by drone, with a pilot scheme being run by aviation tech firm LODD and investor 7X. Meanwhile, US aircraft manufacturer Joby is trialing its flying taxi in Dubai.

• The Gulf’s sleek airports have a new entrant with Oman planning a new passenger terminal at Sohar Airport, and plans for a new Musandam airport, as the country tries to attract more tourists. — AGBI

Tech

• Saudi Arabia has minted a new unicorn: Quick-commerce startup Ninja hit a $1.5 billion valuation after raising $250 million, led by Saudi investor Riyad Capital. The three-year-old company wants to go public in 2027. — Bloomberg

Finance

• Dubai is trying to reduce hurdles for investors to get cash out the door as it overhauls rules governing variable capital companies, a type of investment firm that appeals to family-owned businesses and the ultra-wealthy.
• New York hedge fund Jane Street is setting up shop at ADGM, in a coup for Abu Dhabi’s “capital of capital” ambitions (to say nothing of another kind of coup its co-founder is dealing with in court). — Bloomberg
• Abu Dhabi’s Tabreed, one of the world’s largest district cooling providers, and global private equity firm CVC are acquiring PAL Cooling from Multiply Group for $1.03 billion. The deal adds nine plants, existing and planned, to Tabreed’s portfolio — bolstering its hold on the UAE’s district cooling market.

There will be no more last-minute runs to the baqala for onions or eggs in Saudi Arabia. The government has banned these neighborhood corner stores and mini markets from selling fruit, vegetables, meat, and tobacco — a big shift in a country where supermarkets are often a highway drive away and shade is a luxury in 110° Fahrenheit weather. That two-minute trot across the street was practically a rite of passage, especially when dinner was missing just one thing. The Ministry of Municipality says its new regulations are about food safety, but to many, it’s a drastic adjustment to the rhythm of a daily life where each neighborhood saw at least two of these mini markets nestled between laundromats and hair salons.

Verint Systems, a $1.2 billion maker of software for call centers, has hired bankers to seek a buyer, people familiar with the matter told Semafor’s Rohan Goswami.

The process will give an early indication of AI’s disruption to long-established industries — why sit on hold in a world where personal AI agents can negotiate refunds and flight changes? And importantly for companies, why employ thousands of humans to answer those calls?