Exclusive: Emirates’ ambitions fuel rivalries on Wall Street
A bold plan unveiled this fall by Apollo Global Management and a unit of Abu Dhabi’s state oil company to invest billions in artificial intelligence stalled inside the boardroom of Apollo’s top Wall Street competitor.
For months, Apollo and Abu Dhabi’s XRG had been crafting a new fund to back AI infrastructure. Each side was set to contribute roughly $2 billion at launch, joining a growing set of partnerships between Wall Street and Gulf players chasing the profits and prestige of the AI boom.
XRG’s board gathered in September at Blackstone’s New York offices to discuss the venture. Blackstone president Jon Gray sits on XRG’s board and sometimes hosts rotating meetings. Gray raised concerns, later echoed by other directors, that XRG isn’t an asset manager and that the fund exceeded its mandate as an operator of energy and chemical assets. In the end, the plan was shelved.
Some Apollo executives who believed a rival might have sabotaged the deal out of jealousy, while XRG – founded just a year earlier – continued refining its approach. Both Apollo and XRG, as well as Blackstone, declined to comment.
The aborted initiative offered a rare glimpse into how fierce competition among Gulf states and Wall Street firms is shaping a moment when investors expect outsized returns from helping oil-rich nations pivot to tech-driven economies. Bankers have learned to align the interests of the UAE, Saudi Arabia, and Qatar — each eager to become a regional hub for high finance — but Gulf leaders are discovering their partners also pursue their own political agendas.
This week Abu Dhabi hosts a global investor conference, underscoring its bid to be the world’s “capital of capital” and a premier destination for Western investment.
Thus far, there has been enough appetite and capital to sustain collaboration without heavy infighting. Blue Owl collaborates with Qatar’s sovereign wealth fund to back digital infrastructure and with Abu Dhabi’s Lunate to acquire stakes in other investment managers. BlackRock has partnerships with Saudi Arabia’s Public Investment Fund and Abu Dhabi’s MGX. Across the Gulf, new pools of money and ambitious plans continue to emerge: Abu Dhabi’s latest state investor, L’imad — its sixth fund — surfaced in October and is among the Gulf funds supporting Paramount’s hostile bid for Warner Bros. Discovery.
Yet the era of unfettered diversification may be fading. Saudi Arabia, in particular, has begun prioritizing domestic investments. Going forward, both sides will face stiffer competition for capital and attention, intensifying rivalries among Wall Street firms that are already contending on multiple fronts.
