Gulf

1. G42’s US data centers
2. A leg up for consultants
3. China oil demand peak?
4. Iran and Saudi’s dance
5. MBZ-Putin meeting

After hours in Kuwait.

Welcome back to Semafor Gulf, where a month in, we’re finally holding our official launch event.

These are exciting times for the Gulf. Many are calling it a Golden Age — so many that it no longer needs attribution. Sovereign wealth is surging, cities are undergoing dramatic transformations, and new industries are emerging. Most importantly, citizens and residents from Muscat to Kuwait, Doha to Jeddah, are brimming with optimism.

Semafor Gulf is capturing these trends and delivering insights to your inbox three times a week. We are excited to bring you groundbreaking conversations with the leaders driving these changes.

Our distinguished speakers include H.E. Saud Bin Abdullah Al Attiyah, Deputy Undersecretary for Economic Affairs, Ministry of Finance, Qatar; H.E. Majid Al Suwaidi, CEO, Altérra; Faheem Ahamed, Group Chief Marketing and Communications Officer, G42; Jonathan Adashek, Senior Vice President, Marketing and Communications, IBM; and Madiha Sattar, Managing Director and Growth Ventures Partner, BNY. Together, they will explore the Arabian Peninsula’s impact on culture, investment, infrastructure, climate, and technology.

There are a few more spots left for our live journalism event tomorrow, Oct. 22, in Washington. You can register here. We can’t wait to see you there.

G42’s US compute 4x higher than the UAE

G42 has built up four times the computing capacity in the US compared to at home in the UAE. While G42 is only just beginning to deploy Nvidia’s cutting-edge H100 chips in data centers in the UAE — after facing hurdles from the Biden administration over concerns about ties to China and US export curbs of chips to the Gulf — it has doubled down in the US.

In November 2021, a year before OpenAI’s ChatGPT took the world by storm, G42, through an affiliate, acquired a 1% stake in the California chipmaker Cerebras for $40 million, valuing the company at $4 billion, according to a recent SEC filing.

Since becoming an investor, G42 has also become a significant customer: The Abu Dhabi firm accounted for 83% and 87%, respectively, of Cerebras’ total revenue for 2023 and for the first six months of this year.

Gulf’s consultancy springboard

Consultancy work in the Gulf used to be synonymous with waiting rooms; nowadays, it’s a stepping stone to board rooms, as Gulf positions have emerged as a pathway for rising in the ranks of major firms, according to Bloomberg. Executives at BCG and McKinsey have opted for jobs in the region because they see the Gulf as an effective way to rise and eventually land partner roles.

Globally, the consultancy fever is cooling: Revenue is expected to grow 6% in 2024, down from double digits during the pandemic, and the majority of US clients are cutting their consultancy spend.

For those eyeing promotions, a pivot to the Gulf — whose consulting market is forecast to expand 11% this year — makes sense. In an interview with Swiss NZZ newspaper, Accenture CEO Julia Sweet advised young people to consider working in Saudi Arabia, the UAE, or Qatar. “I think the Gulf states are today what Asia was in my youth. If I were young again, I would go there,” she said.

Aramco sees stronger China oil demand

The world’s biggest oil exporter expects its top customer will need its crude for longer than analysts expect. Saudi Aramco CEO Amin Nasser said demand for naphtha — used to make chemicals — in China is rising, driven by the need for chemicals to produce electric vehicles and solar panels, according to Reuters. Some analysts forecast that China’s oil demand is peaking as Beijing pushes ahead with vehicle electrification. The IEA said EV adoption is shaving almost 5 million barrels of oil a day in China’s expected demand by 2035.

There will be no abrupt drop in global demand for oil, Nasser said at Singapore International Energy Week, but rather a “a long plateau.” Last week, the IEA projected hydrocarbon demand will stop growing this decade as the world enters the “Age of Electricity.”

Saudi and Iran’s hot-cold relations

Saudi Arabia and Iran’s diplomatic thaw hit a snag as friction resurfaced in Baghdad.

Iran-linked armed groups stormed MBC’s offices in Baghdad after the Saudi channel aired a report titled “The Millennium of Salvation from Terrorists,” referring to the slain leaders of Hamas, Hezbollah, and Iran’s Revolutionary Guards (Quds Force). Iraqi regulators suspended MBC’s license, and MBC surprisingly removed the report and launched an investigation: The slow détente with Iran and the rising Arab anger towards Israel are shaping its more measured response.

Meanwhile, regional discontent towards Iran is growing, with critics accusing Tehran of abandoning its allies. Even Lebanon’s caretaker prime minister accused Iran of “blatant interference” in Lebanese affairs, a rare and strong rebuke from Beirut.

MBZ meets Putin in Moscow for BRICS

The UAE-Russia relationship is being measured by prisoner swaps and trade figures. Moscow and Kyiv said Friday that they had swapped 95 prisoners each following UAE-led negotiations, as President Sheikh Mohamed bin Zayed arrived in Russia on Sunday ahead of a summit of the BRICS group. Bilateral investments between Russia and the UAE have tripled in the last three years to reach $7 billion.

Meanwhile, Saudi Arabia is “sincere” in its efforts and would be an acceptable location for Russian-Ukrainian peace talks, Russian President Vladimir Putin said on Friday, but any negotiations would be dependent on Ukraine lifting its ban on dealing with Russia, Arab News reported. The kingdom has been invited to join BRICS but has so far not accepted.

IPO

• One of the Middle East’s biggest supermarket chains began shopping its IPO around on Monday, kicking off what bankers say could be the UAE’s largest share debut of the year. The offering of the 25% stake in Lulu Retail Holdings is set to run from Oct. 28 to Nov. 5, and is expected to start trading on the ADX on Nov. 14.

Premium App Economy

• YouTube, Snap, and X are charging more for premium subscriptions in Saudi Arabia than in the rest of the Gulf, according to a roundup by Al Eqtisadiah. Prices have been rising from token amounts a few years ago, suggesting consumers in the region are becoming more comfortable paying. Last week, Saudi podcast studio Thmanyah launched its own subscription service at $5 a month.

Finance

• Saudi bank loans hit an 18-month high of $753 billion in August, driven by corporate borrowing in the real estate, trade, and manufacturing sectors, central bank data shows. Loan books are growing at 12% a year, nearly twice the rate of the Gulf average, according to Fitch Ratings. — Arab News

Kuwait is embracing its night owl culture with an innovation so obvious — in hindsight — it’s a shock it isn’t uniform across the Gulf: nighttime government services.

Starting Jan. 5, some government agencies will offer evening shifts, making it the first Gulf country to do so. About one-third of public employees will be allocated to the nighttime hours, and the government expects this will streamline bureaucratic procedures and help tamp down morning traffic.

Kuwaitis, of course, disagree, saying the solution to congestion is to improve roads and that the move will create more evening traffic instead. “The good thing is,” one X user wrote, “that the evening shift will end the ‘I’m leaving work for a procedure at the ministry’ excuse.”

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