Author: flowie, ChainCatcher
Just now, the state-owned capital MGX of Abu Dhabi announced an investment of $2 billion in CZ, which is MGX's first investment in Crypto and also CZ's first acceptance of institutional investment, and the largest single investment in the crypto field to date.
More interestingly, MGX has a strong background, not only managing hundreds of billions of dollars in capital, but also bringing together the most powerful and wealthy members of the UAE royal family and "tycoons".
After heavily investing in AI, what is the significance of MGX's move towards Crypto? And why did CZ, who never lacks money, get this huge investment this time?
Billion-dollar gamble on AI, the UAE royal family's capital is now eyeing Crypto
MGX (MetaGPT X) was established just a year ago, jointly established by the Abu Dhabi Artificial Intelligence and Advanced Technology Committee (AIATC), the Abu Dhabi sovereign wealth fund Mubadala, and the UAE tech giant G42. MGX's assets under management are expected to exceed $100 billion.
MGX can be said to be one of the most important strategic capitals in the UAE's efforts to diversify its economy. It also brings together a top-notch lineup in the fields of politics, economy, and technology.
The chairman of MGX's board of directors is Sheikh Tahnoon bin Zayed Al Nahyan, who is the son of the founder of the UAE and the younger brother of the current President of the UAE, as well as the Deputy Ruler of Abu Dhabi and the National Security Advisor.
Nearly half of the UAE's sovereign funds are in the hands of Tahnoon, who controls the Abu Dhabi Investment Authority (ADIA), which invests overseas with $853 billion in assets, and the Abu Dhabi Developmental Holding Company (ADQ), which invests domestically with $110 billion in assets.
The vice chairman of MGX's board of directors and head of investment strategy, Khaldoon Khalifa Al Mubarak, is the CEO of Mubadala, one of the three major sovereign wealth funds of the UAE, which manages over $300 billion in assets, accounting for the other half of Abu Dhabi's sovereign funds. MGX's CEO is also held by Ahmed Al Idrissi, the head of Mubadala's direct investment department.
Other members of MGX's board of directors include the Vice Chairman of the Central Bank of the UAE, Jassem Al Zaabi, and the CEO of G42.
It is worth mentioning that G42 is one of the most important tech giants in the UAE, focusing on fields such as artificial intelligence, cloud computing, healthcare, and cybersecurity. For example, G42 has developed the most advanced Arabic large language model "Jais" in the Middle East; G42 Cloud is one of the largest cloud computing platforms in the Middle East and is of great strategic importance in the UAE, being regarded as the "jewel in the crown" of the UAE.
With billions of dollars in capital and a top-notch lineup, what does MGX want to invest in?
According to public information from the Abu Dhabi government, MGX's investment strategy will focus on the following three areas: artificial intelligence infrastructure, semiconductors, and meeting the core technology and applications of artificial intelligence.
MGX has participated in the latest round of financing for OpenAI, and has collaborated with BlackRock, Global Infrastructure Partners (GIP), and Microsoft to launch a $30 billion fund focused on the construction of data centers and their power supply; it has also participated in the "Stargate" artificial intelligence investment project announced by former President Trump.
After heavily investing in AI and semiconductors, MGX's first formal entry into the cryptocurrency and blockchain field through its investment in CZ may indicate that the UAE royal family's capital will, through investment, layout and promote the widespread adoption and compliant development of digital assets.
For the crypto industry, the capital of the wealthiest country may bring a huge boost to crypto, accelerating the global application of blockchain technology and enhancing market confidence and compliance.
Why did CZ, who never lacks money, get this huge investment at this time?
As the largest crypto exchange, CZ is not short of money.
In 2021, after rejecting an investment from Sequoia Capital, CZ clearly stated that CZ did not need external capital, and he was only interested in cooperating with venture capital firms that could help the exchange cooperate with regulators and obtain operating licenses.
Four years later, CZ received $2 billion from the UAE state capital. What is the intention?
Finding a local umbrella of protection may be one of the goals. Under the pressure of crypto regulatory compliance, CZ has been wandering, experiencing being "expelled" by China, Tokyo, and Singapore in succession, before finally settling in Dubai.
Crypto KOL AB Kuai.Dong said that the significance of this investment goes far beyond the capital itself. "The entry of the UAE government is like inviting many top global political capitals to become supporters of CZ."
Under the pressure of compliance and other aspects, leaning on the center of state power has also become a trend for crypto companies. In AB Kuai.Dong's view, compared to the power changes every four years in North America, the UAE, Saudi Arabia, Bahrain, and Qatar are all super stable entities.
It is understandable to lean on the UAE government for compliance and policy support, but why the huge amount of $2 billion, and where did this equity sale come from, has raised some speculation.
Last November, Bloomberg reported that CZ had received an offer to sell his controlling stake in the exchange - these shares made up the majority of his personal net worth, but he refused to disclose the buyer or the price. Twitter users speculated that it might come from CZ's family members through their proxy shares, but there is currently no further public information disclosure.
However, regardless, leaning on the UAE government is an extremely important historical milestone for CZ or the crypto field.
