Michael Milken in Conversation with HE Khaldoon Khalifa Al Mubarak | Middle East & Africa Summit

Thank you. It's wonderful to be here. Welcome everyone. Thank you for being here.

Well, first of all, I've known this man how many years now? Are we going to say... You were in your 20s? So that means five years ago. So unfortunately much longer than that. And I cannot tell you all what a privilege it is to be on stage with Mike. What a privilege it is to call him a friend. And what a privilege it is to have over these many years counted on his advice, on his guidance that has always been there, always been there for free. And he's been a great friend and partner and I would say family to myself but more importantly to this country. So for that, I would say thank you, Mike. Now answering your question, I think I'll answer it in the following way. As you all know, Mike, and I think most of you know, the UAE has always been pretty consistent in trying to catch the trend early and take educated, I don't like the word bets, but let's say educated strategic moves in spaces that it believes are going to be winners going forward and that have a massive implication potentially on the growth and development of the economy. Over these last 20 odd years, we've taken such decisions, renewable energy as an example, semiconductors, other spaces that we've really done the right decision in terms of investing and investing early and taking a long-term perspective on where that space is going to go. On AI, I think the UAE also was relatively early in the sense that if you go back to 2017, the UAE was one of the first countries to have actually an appointed federal minister responsible for AI back in 2017. We've had a university fully focused on AI, MBZ AI University, established in 2019. So very early time.

You're not leaving without doing that. I'm going to make sure. And that strategy of really investing, understanding, and when I say investing, it's not just putting money into it. It's the education side of it. It's the infrastructure side of it. It's the human capital aspect of it. And in every one of these tranches, I think the UAE has been focused on how AI will be part of society here. So that strategy continued and I think we established then a national champion that is focused on AI development, G42. We then established a focused AI investment and infrastructure vehicle which is MGX. You can see it's a trend of a very targeted and very focused space that has been going on for years. It culminated, I think, in a very important milestone which happened in May last year when President Trump came to the UAE. And what you'll see is the slide on top, I'm supposed to see it here so I'll have to turn. In May of last year, the president came and there was a very important announcement that was made in which the United States and the UAE had an AI cooperation agreement that set the foundations to the buildout of one of the largest AI clusters outside of the United States here in the UAE, a 5 gigawatt AI factory, Stargate, that was announced. The slide I'm going to show you here is a very interesting one because typically in the UAE, we try to do the leg work early and we hit the ground running. When the president came, I was showing him this model of the factory or the space. This is a 19 square kilometer area. It is about nine times larger than Monaco. And we had already started the early foundation works on the site. We're going full steam ahead on this project. Obviously, it was contingent on a very important agreement between our two governments and more importantly, or equally important, on the premise of having the right partnerships in place. So that day we signed an agreement. The partners, if you go back to the previous slide, what you see right now is a time lapse of what's happened over the last 6 months since we've signed that agreement. As we speak right now, we've had over 100,000 square meters of concrete poured. Phase one, which is two 200 megawatts, is now underway. The foundations are basically enough to build an entire city block already put in place. The amount of steel works that have been put in place already is almost one and a half times the Eiffel Tower. Over 5,000 people are now working on that site. 200 days. You can see the time lapse. And that first phase of 200 megawatts will be in place and ready at some point in the third quarter of next year. Another important milestone happened a couple weeks ago which was the agreement or the approval from the US Department of Commerce on the export of what's going to go into these factories, which is the chips. Just to give you order of magnitude, the UAE now has a couple of thousand chips. The region, meaning this region, has no more than 10,000 chips as a whole right now operational. Through the agreement that we have in place right now and the approvals we have, about 35,000 GP300 chips are coming into this facility. This is like going from a speed of 5 kilometers an hour to about 250 kilometers an hour right there. This is the speed of how we are moving and executing on this project. And I think this is a very good example of another way of how when the UAE proceeds on a strategic project, this has massive ramifications. The next slide shows really the partnership approach which kind of typifies how the UAE always approaches these sorts of partnerships and programs. You can see on this slide everywhere from OpenAI, Oracle, Nvidia, SoftBank is in there, Microsoft is also with us in this. So you have the technology industry coming in in partnership on executing on this project. This is just to give you an idea how the UAE is moving in that space and the background to it.

So the key is about enablement and AI enablement. Building the infrastructure, investing in the space, building the partnerships, that's certainly a very important component in this journey. But then the capability building out that capability and getting a population to transition and become AI enabled. I believe that's an area for sure that Abu Dhabi has spent a lot of time and focus and energy on, and you see it today. I think one of the best examples I like to use in terms of that transition from old economy to new economy in this new world is how our government is helping the population through the transition of government services from the traditional human-to-human interaction to now essentially making it an intelligence collaboration between the citizen, the resident, and government through an intelligence platform. Today we have a platform called TAM. Every resident and national in the country in Abu Dhabi here have this on their phones. You have 100,000 use cases on that platform. Essentially you can do everything right now by talking to a government agent on your phone, from renewing your driver's license. You don't have to go to the DMV anymore. You don't have to set foot in a municipality anymore. Anything to do with your property, land, etc., you can do it now seamlessly through your app. You have your entire medical file right now at your disposal at all times. You can move files to doctors, to institutions, you connect to any services that the government provides, you have a direct connection and a direct communication through intelligence. Now you can actually check the report cards of your kids. That's all seamlessly built into that system. This is not something that is aspirational. It's actually operational as we speak right now. And it's incredible because what you have right now, I was in a majlis a couple of weeks ago talking to a 92 year old young man, and this man pulled out his phone and was showing me something that he was describing in terms of a property he owns, but he got on the app. So you have a 92 year old man right now that is AI enabled. So that populational transition is very effective when you help the population through great service to transition into AI. That is what we're doing here in Abu Dhabi. And that's just another example of this population-wide transition that I think the UAE is really pushing the frontiers on.

Again, I'm using my AI powers right now. I expected you to ask the question. And about a year ago, me and Mike sat right here. Rashid, put the video just 10 seconds, 20 seconds. What I told you last year when you asked me this question.

It's all about accountability. One promise I'm going to make to you today. We and Mubadala are going to be on the frontier side of AI enablement in our way of doing business next year, 2025. By the end of next year, 2025, in everything we do in the way we operate, AI is going to be fully ingrained. Okay. So that's what I said. Don't clap. That's just what I said. What we've done now effectively is at the moment we have enabled a board observer, an AI agent board observer for the board. At our investment committee, we have a system that we've developed called Maya. Maya is a platform that supports decision-making across the origination all the way towards the ultimate investment committee decision. Maya now we use it at the level of the investment committee in every level of the origination, development, assessment, analysis, due diligence. All of that is now heavily utilized by all our executives. It's a platform that has gone from, as you know with these things, get smarter and smarter. We've now pushed through over a thousand transactions that Mubadala has done over these last 12 months, making that system now almost essential in the way we operate, in the way we work. And I think our effectiveness now, I can see it, difficult to quantify at the moment the net impact of it, but I think if you ask any executive in Mubadala, they'll tell you right now this is becoming an invaluable tool in the way we operate, in the way we make decisions, and in the way we run our diligence. So, obviously, a lot of companies have pursued that. We're not the only ones. But now we are pushing the envelope even further. I'm going to show you another video here, just a short one on Maya, which is the next evolution step that we're now actually going through. Can you put that? Maya IC digital twin demonstrates a next frontier AI solution that simulates the IC meeting decision-making process. It harnesses AI agents to represent each of the IC members' personas and focal areas to model the discussion and decision-making process. The digital twin provides deep investment insights in the context of a simulated dialogue between each of the IC's personas. So we've created now our digital twins. You can see I don't like the picture honestly, but it's okay. So we all have our digital twins, the investment committee, and it now mirrors our tendencies, our the way we think, the way we decide, what sort of questions we normally ask. We can mimic now an entire investment committee meeting. Right now I can sit with you Mike, have this conversation, and my digital twin is having the investment committee. Not at the moment making a decision, thank God, but you can see just the level of detail now that we are able to get to in a much more effective and efficient way through these digital twins. So this is another process that now we are going through. We're creating our own contrarian agent, very powerful, as you know particularly in investment decision-making, the power of having a strong contrarian member in a board or in a committee. Now we have our contrarian agent. So it is now pretty much sewn into the DNA of how we operate and we're going to continue to evolve and generate more ideas in terms of how we can make AI hand in hand in the way we run and operate businesses.

I'd say Mike, on this one, in any organization that you're involved in, all of us run, there is a process of building consensus, but there's also times where you need to just make a decision. I think this one was more of the latter category. It's about just deciding we're going to do this and we're going to do it and you're either on board or you're not. It is a high conviction decision. It is absolutely in my view the right perspective. And I think what you find with people, while naturally you're going to be resistant, and I've seen it as we started also pushing it into many of our companies, many boards. I sit on a financial institution, I won't name it, where again there was a lot of resistance from the management in terms of pushing this through. And at the end, I said okay, well I'm not attending any board meetings until this is operational. And they were like wow, you know, we can't, you know, this is governance, regulations, etc. Figure it out. I'm not going to tell. So I think you have to ultimately, and I believe strongly about this, you have to make that leap. And it's not a leap of faith. I think there's conviction in this. It's crossing that bridge. And once you cross that bridge institutionally, and I've seen it in every single use case in Mubadala or any one of our companies, once they cross that bridge there's no going back. And everyone that resisted inevitably will come to you and say thank you. Thank you for pushing us in that direction because now we can see the benefits clearly.

I would say majority inside because you're crossing new grounds and you have to be very careful particularly with IP and your own, you know, this is your own basically secret recipe of how you operate and how you decide. But you need also a technological aspect of the right partners that can come in and really fill some of these technical voids that are necessary. So it was I would say majority in-house but with certainly a couple very important technical partners.

Yeah, I think competition is inevitable and competition is necessary and actually it is critical. You don't make the next leap without proper competition and you can see that in every business in every industry when you have actually a strong competitive situation, that's when actually parties push each other higher and higher. So I think from my perspective, or I would say from Mubadala and even a step up, the DNA of the place here in the UAE, in Abu Dhabi, is a DNA of partnership. It's a very collaborative, partnership-oriented approach and that you can see it in everything. And that has proven to be a very successful model. When I look at Mubadala, I would say continuing going forward, we will continue to follow that approach of finding the right partners, the best-in-class in whatever sector we're involved in, in whatever geography we're involved in, and put the right constructs to put these partnerships in place and then grow and invest and partner and succeed together. That model, I have now ample evidence, is a very effective model. And it will continue to be the case.

So Mike, this is a process that you kind of helped seed in your own way. Mike, as always, will give you advice, he'll give you hints, but then the onus on you is to pursue it. Until Mike really seeded the idea that we should now think about moving the way we operate towards actually, you know, we do a decent job managing money. Why don't we manage other people's money and get a fee for it? And that led to the creation of Mubadala Capital. And that's, you know, we started small, we had a set of early investors that partnered with us in that space. Mike gave the advice and then put his money behind his advice and was one of those investors. And over time we've been very successful as the record shows. And that model of managing, we are I think the only sovereign fund today that has created a vehicle that manages third party capital. We've done it generally, we've done it also in focused areas like venture, like Brazil. I would say Brazil is an excellent example of a market that we've targeted. We went, we built the capability, we built the right expertise in that market. We have multiple funds there, all of them are I would say upper echelon, tier one, probably top 10 percentile in terms of performance as funds. And we've done that with probably a third of our money and two-thirds of other people's money. And now we are growing through both organic and inorganic ways to build Mubadala Capital to be one of the premier money managers in the world. And that I have to say is thanks to Mike because he actually was the one that seeded that idea. I don't think he thought I'd actually follow through. I think he thinks sometimes he tells me stuff and I don't really listen. I actually listen, Mike.

By the way, I had a nice lunch with Mike right now. He gave me three ideas, three that are actually brilliant. Now, you know, he's going to KPI me on this one. Let's see how I do next year.