Abu Dhabi’s Lunate takes over G42’s China fund

A new investment vehicle in Abu Dhabi, Lunate, has assumed control of the China-focused fund previously managed by artificial intelligence (AI) firm G42, according to sources familiar with the matter.

This move keeps the assets under the control of a powerful member of the emirate’s royal family, Sheikh Tahnoon bin Zayed Al Nahyan.

Lunate plans to build a small team to manage the former G42 entity, known as the 42XFund. The fund holds stakes in Chinese technology giants like ByteDance and JD.com.

Sheikh Tahnoon oversees both G42 and Lunate, which is a unit of the massive International Holding Company (IHC).

IHC, chaired by the Abu Dhabi royal, boasts a market value of $250 billion and is majority-owned by Sheikh Tahnoon’s private investment firm, Royal Group (also the parent company of G42).

Representatives from G42, 42XFund, Lunate, and the UAE government declined to comment on the situation.

G42, aiming to establish itself as an AI powerhouse in the Middle East, reached an agreement with the US Commerce Department as part of a broader effort to curb China’s technological dominance.

G42’s CEO, Peng Xiao, committed to shifting focus from China to the US and other Western markets, attracting investments like Microsoft Corp. to invest $1.5 billion.

However, concerns have been raised in Washington about G42’s ties to China, with doubts at the Pentagon about a complete separation. The involvement of Lunate in the deal has raised further questions about its alignment with US strategic objectives.

Notably, Lunate has already secured several significant deals, including an investment in Dubai’s iconic ICD Brookfield Place office tower and a 40 per cent stake purchase in Abu Dhabi National Oil Company’s oil pipeline network.

Attribution: Bloomberg