Geopolitical shifts drive sovereign funds towards national priorities, study finds
By Libby George
LONDON, July 10 (Reuters) – Shifting geopolitical alliances are forcing sovereign wealth funds to place greater emphasis on investment returns as well as strategic national priorities, from resilient infrastructure to “key domestic industries,” according to a study published on Friday.
Research by Spain-based IE University found that sovereign wealth funds, which manage more than $15 trillion, are playing an increasing role in financing artificial intelligence, as governments increasingly treat artificial intelligence and semiconductors as strategic assets.
“This fragmented world has had an impact,” said Javier Capapé, editor of the report and director of sovereign wealth research at IE University. “Sovereign wealth funds are increasingly used by governments to implement national strategies, developing stronger positions in global value chains.”
The study also showed a trend towards larger deals. While the number of direct investments decreased by 17% compared to the previous reporting period, with 391 transactions, total expenditures increased by 91% to $ 404 billion, according to the university’s 2024 report.
Capapé said AI-related investments account for about a third of the spending tracked by the study, with companies like Stargate, OpenAI and Databricks attracting capital from independent investors with long-term investment horizons.
Recent deals include Abu Dhabi-based MGX backing OpenAI, funding for xAI from MGX, Qatar Investment Authority and Oman Investment Authority, and participation of QIA and Singapore’s GIC in Anthropic’s $13 billion funding round.
The United States received the largest share of investment at $220.4 billion, helped by a strong focus on artificial intelligence. But Capapé said the study, which tracks direct investments for 18 months through December 2025, only captures “the tip of the iceberg” because most state fund investments are not publicly disclosed.
Energy-rich countries including the Gulf states and Norway were big spenders, but Singapore’s Temasek was the leader in deal volume with 71 deals.
In addition to MGX, 12 new funds were tracked in the report, including funds in Ireland, the UK, Botswana and Spain. Capapé said this trend reflects a growing interest in using state capital to pursue strategic investments and expand influence abroad.
“Non-market factors matter more than at any time since the end of the Cold War,” Capapé said. “We are entering a new paradigm, and sovereign wealth funds have been part of this change.”
(Reporting by Libby George. Editing by Mark Potter)
