👋 Hello from the Middle East!

Today in The Daily Circuit, we’re looking at fresh venture capital funding for Jordanian tech startups, new scrutiny by Republicans in Congress of Microsoft’s $1.5 billion AI deal with UAE-based G42, China’s efforts to stoke trade with Saudi Arabia and the arrival of Lebron James and Team USA in Abu Dhabi on their way to the Paris Olympics. But first, Neom’s builders confront the reality of lower oil prices.

Neom, the flagship mega-project of Saudi Crown Prince Mohammed bin Salman’s Vision 2030 economic roadmap, is facing budget cuts. The development along the Red Sea coast is expected to be allocated 20% less than its targeted budget for this year, Bloomberg reports. The revision comes as the kingdom reconciles lower-than-expected oil prices and foreign investment that has it on track for at least three more years of projected national budget deficits.

Saudi Finance Minister Mohammed Al-Jadaan has previously said the eight-year-old Vision 2030 plan may face delays because the kingdom needs to be careful about “overheating” the economy – which may cause inflation to rise. 

“If you don’t allow your economy to catch up with your projects, basically what will happen is you’ll import a lot more,” Al-Jadaan said at the Qatar Economic Forum in May. As a result, Saudi Arabia could lack the factories and other capacity needed to support its plans. “So giving it more time is actually wise,” he said.

Modifying the vision is not necessarily a bad sign, analysts told Bloomberg, echoing the Finance Minister’s comments. The “rightsizing” of projects is a sign the kingdom is maturing, according to Goldman Sachs’ MENA Economist, Farouk Soussa. 

“What they’re doing in terms of adjusting these projects gives us a lot of comfort,” Soussa said. “They’re basically saying they’re not going to go for broke or bet the house on any one particular thing. If it’s possible, they’ll do it. If not, they won’t. They’re being quite sensible.”

SMALL CHANGE

Jordan’s $98 million Innovative Startups and SMEs Fund said it will invest $5 million in the UAE-based Global Ventures Fund III to support Jordanian entrepreneurs and startup companies. The move is a small bright spot at an otherwise dismal time for startup investments globally. Global Ventures is a UAE-based venture capital firm focused on growth-stage investments across the Middle East and Africa with $300 million in assets under management and 60 businesses in its portfolio. Nearly all of the recently registered companies in Jordan are small and medium-sized enterprises and start-ups, which generate more than half of private-sector economic growth and 60% of new employment opportunities, Noor Sweid, Global Ventures’ Managing Partner, said in a statement.

CHINA ASSESSMENT

Microsoft’s $1.5 billion investment in UAE-based artificial intelligence firm G42 is facing new challenges from Republicans in Congress over concerns about China. Rep. Michael McCaul of Texas, Chairman of the House Foreign Affairs Committee, and Rep. John Moolenaar of Michigan, head of the Select Committee on China, asked the Biden Administration for an intelligence assessment about the deal, Reuters reports. In a letter to White House National Security Adviser Jake Sullivan, the lawmakers requested an evaluation of G42’s ties to China’s Communist Party, military and government before the Microsoft deal advances. They cited a recent visit by UAE President Sheikh Mohamed bin Zayed to Beijing, which according to Chinese state news agency Xinhua, included discussions of cooperation in AI. “We remain deeply concerned by attempts to move quickly to advance a partnership that involves the unprecedented transfer of highly sensitive, U.S.-origin technology, without congressional consultation or clearly defined regulations in place,” the lawmakers said in the letter. Yousef Al Otaiba, the UAE’s Ambassador to Washington, said in a statement to the Financial Times that his country has “made substantial progress with the U.S. to strengthen the security and control of critical technologies between both countries.”

Public Investment Fund: China’s Commerce Secretary said the country would like to intensify trade and investment exchanges with Saudi Arabia in a statement on Friday. Minister Wang Wentao held talks on Thursday with Yasir Al-Rumayyan, who is visiting China. Al-Rumayyan is Governor of the PIF, Chairman of Saudi Aramco and in charge of Saudi Arabia’s economic cooperation affairs with China. Wang said China is ready to deepen cooperation in infrastructure, energy resources, green development, digital economy, and welcomed Saudi companies such as its sovereign wealth funds and Aramco to continue to “take root” in China.

Mubadala: The Abu Dhabi sovereign wealth fund’s Managing Director Khaldoon Al Mubarak is on the guest list for the wedding this weekend of Anant Ambani, the youngest son of Reliance Industries Ltd. Chairman and Asia’s richest man Mukesh Ambani, the Deccan Herald reports. Mubadala is a major investor in Reliance and Al Mubarak is also the Chairman of City Football Group which owns Mumbai City FC. 

Qatar Investment Authority: London’s Heathrow Airport, part-owned by the QIA, China Investment Corp. and Spain’s Ferrovial, said passenger numbers rose in June as it experienced a strong start to the summer season, which it called the busiest ever.

📈 Rights Issue: Saudi Arabia’s Ayyan Investment Co. will launch a new share offering next week, seeking to raise $53 million in a rights issue representing 24.8% of its capital.

🕌 Islamic Bond: A $500 million sukuk, or Islamic bond, issued by the UAE’s Sharjah Islamic Bank and traded on the Nasdaq Dubai exchange, was oversubscribed threefold with orders totaling $1.5 billion.

🏗️ Construction Errors: Buildots, an Israeli startup that enables construction companies to overcome inefficiencies and prevent errors through AI technology, secured $15 million in funding led by Intel Capital.

🚗 EV Batteries: Australia’s Critical Metals Corp. has formed a joint venture with European Lithium-Obeikan Group to build a plant in Saudi Arabia for processing lithium hydroxide, which is used to make electric vehicle batteries.

🚜 Fertile Fields: Abu Dhabi-based Fertiglobe, a joint venture between ADNOC and OCI Global, announced on Thursday that it won the bidding to supply renewable ammonia to the European Union.

💺 Flying High: Etihad Airways reports a 38% increase in traffic during the first six months of this year compared to the same period of 2023, with 8.7 million passengers flying the Abu Dhabi-based carrier.

Sheikh Mohammed bin Rashid, UAE Vice President, Prime Minister and Ruler of Dubai, met with local dignitaries, business people, investors, senior officials, and heads of private sector entities at the Union House in Dubai on Thursday. The meeting was attended by Sheikh Ahmed bin Mohammed bin Rashid, Second Deputy Ruler of Dubai and Sheikh Ahmed bin Saeed, President of Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates Airline. 

Marwan bin Ghalita has been named Director-General of the Dubai Land Department in a decree by Sheikh Mohammed bin Rashid, Ruler of Dubai and UAE Vice President.

Hartwig Fischer, the former British Museum Director, has been appointed the Founding Director of Saudi Arabia’s new world culture museum in Riyadh, which is set to open in 2026.

Stephen Ross, the 84-year-old founder of New York-based Related Companies, which has extensive Gulf holdings, is launching a new Florida-based firm called Related Ross that is already the largest commercial property owner in downtown West Palm Beach, the Wall Street Journal reports.

Jonathan Gray, President and COO of Blackstone, discussed the firm’s $17 billion investment in India at the Forbes Iconoclast Summit in New York last month. “We’ve had incredible success in both real estate and private equity, playing the rise of the consumer there,” he said. “I think it’s a very interesting place. Obviously you have to know what you’re doing.”

Leah Cotterill, CEO of Cigna Insurance’s Middle East division, told Arabian Business she believes that her appointment as the first female executive in her post “is not just about personal achievement but rather paving the way for future female leaders.”

Lebron James, Steph Curry and other NBA stars who will be playing for Team USA at the Paris Olympics flew to Abu Dhabi late Thursday to prepare for exhibition games next week against Australia and Serbia.

🏝️ Desert Island: Al Noor Island, a popular family-friendly destination in the UAE emirate of Sharjah, has been ranked among the top 10 Middle East attractions by TripAdvisor, winning a “Best of the Best” title for 2024. Sharjah’s Mleiha Archaeological Centre and Al Montazah Parks also picked up Traveler’s Choice Awards. 

July 2-Aug. 25, Riyadh, Saudi Arabia: Esports World Cup. An international competition for professional gamers with a $60 million prize pot. Boulevard City.

July 9-13, Sun Valley, Idaho: Sun Valley Conference. Sponsored by Allen & Co., the annual “summer camp for billionaires” brings together some of the world’s most influential leaders in finance, tech, entertainment and politics. Sun Valley Resort.

July 15-17, Abu Dhabi, UAE: USA Basketball Showcase. The 2024 USA Basketball Men’s National Team will host the national teams of Australia and Serbia for three matches. Etihad Arena. 

July 15-26, Granada, Spain: ADIA Lab International Summer School. A course of lectures and case studies to explore the critical role of trust and safety in AI, examining the ethical, technical and societal implications of AI applications. University of Granada. 

July 16-19, Aspen, Colo.: Aspen Security Forum. Pentagon leaders, defense contractors and security officials from around the world meet for a four-day conference. Aspen Institute.

July 27-Aug. 4, Washington D.C. Mubadala Citi DC Open. Tennis tournament featuring nine of the world’s top 20 players. Rock Creek Park.

Aug. 12-15, Riyadh, Saudi Arabia: Saudi Food Expo. One of the kingdom’s largest trade shows for the food & beverage industry. Riyadh Front Exhibitions. 

Sep. 30-Oct. 2, Dubai, UAE: Future Hospitality Summit. The global conference for leaders in the hospitality industry expands this year at a new location with dedicated space for ESG planning, country pavilions and a larger exhibition area. Madinat Jumeirah.