Kuwait invests $9bn in AI and digital sectors as sovereign fund tops $1 trillion in assets

The 2026 annual report issued by Global SWF revealed that Kuwait’s sovereign wealth fund, managed by the Kuwait Investment Authority (KIA), invested approximately $9 billion in artificial intelligence and digital sectors over the past five years. Of this amount, $6 billion was directed toward digital investments, while $3 billion went into artificial intelligence.

According to the report, the total assets of Kuwait’s sovereign wealth fund rose by about $22 billion in 2025, reaching $1.002 trillion, placing it sixth globally among sovereign wealth funds in terms of assets under management.

The report noted that Kuwait’s investments form part of a broader Gulf-led investment surge, spearheaded by Abu Dhabi’s Mubadala Investment Company, which injected $12.9 billion, followed by the Qatar Investment Authority with investments totaling $4 billion, reports Al-Rai daily.

It highlighted that Gulf sovereign wealth funds accounted for 63 percent of global sovereign spending on artificial intelligence between 2020 and 2025, amounting to around $21.2 billion, bringing total Gulf investments in the sector to $13.4 billion. This growth has been driven largely by direct investments led by funds in Kuwait, Saudi Arabia, the UAE and Qatar.

Beyond artificial intelligence, the report emphasized the Gulf’s growing dominance in the wider digital investment space, including digital infrastructure and data centers. Global sovereign spending in this field reached $107.6 billion, with Gulf funds capturing approximately $41.9 billion, or 39 percent of the total.

Global SWF said sovereign wealth funds worldwide are entering a new phase of qualitative growth, with total global assets under management reaching a historic $15 trillion. When combined with public pension funds and central bank assets, the figure rises to $60 trillion, with expectations that it could reach $80 trillion by 2030, reflecting the expanding role of sovereign investors in global markets.

Despite a decline in the number of individual transactions, Gulf funds—mirroring global trends—have shifted toward fewer but larger deals. The average value of a single investment climbed to around $500 million, signaling a strategic focus on major transactions, investment platforms and long-term partnerships.

This trend has been fueled by ambitious strategies targeting advanced technology sectors and supported by a strong recovery in global financial markets.

The report noted that these developments underscore the growing financial and geopolitical influence of Gulf sovereign wealth funds, which have emerged as key drivers of global digital innovation, moving decisively away from traditional investment sectors toward value-added opportunities.

Global SWF data confirmed that the Middle East has become a central hub of the emerging digital economy, with the seven largest Gulf sovereign wealth funds accounting for 43 percent of total government-invested capital worldwide, equivalent to a record $126 billion.

In a related context, Saudi Arabia’s Public Investment Fund ranked as the largest single dealmaker in 2025, leading nominal sovereign spending with investments totaling $36.2 billion, boosted significantly by the acquisition of Electronic Arts.

Meanwhile, Abu Dhabi’s Mubadala retained its position as the most active fund for the second consecutive year, completing 40 deals valued at $32.7 billion, excluding the Electronic Arts transaction.

The report added that this heightened activity coincided with a broad recovery across asset classes, including fixed income, public equities and infrastructure, strengthening the influence of sovereign investors and public pension funds.

Geographically, the United States maintained its lead with $13.2 trillion in sovereign assets under management, followed by China with $8.2 trillion and the UAE with $2.9 trillion.

The US also remained the top destination for foreign direct investment, attracting about $131.8 billion in 2025, nearly double the previous year’s level.

Conversely, sovereign investment flows into China declined sharply to $4.3 billion in 2025 from $10.3 billion in 2024, reflecting a strategic reorientation toward Western markets and emerging technologies.

The report concluded that sovereign wealth fund participation—either directly or through venture capital arms—has accelerated the maturity of the region’s technology ecosystem.

By providing long-term, patient capital, these funds have enabled startups to scale regionally and globally while attracting international expertise and foreign investment, reinforcing the Gulf’s position as a magnet for innovation and capital.