Global capital race never more intense, says UAE minister

• AI and energy among most contested
• UAE suffers from perception gap
• ‘Still a bridge between East and West’

Despite record foreign direct investment inflows, the UAE is having to fight harder than ever for a share of global capital in sought-after sectors such as artificial intelligence and clean energy, the country’s investment minister has told AGBI.

The country is entering a new phase of competition as global investment flows become more fragmented and governments direct capital towards larger strategic projects and fewer countries and industries.

“Competition among investment destinations has never been more intense,” said Mohamed Hassan Alsuwaidi, the UAE’s minister of investment.

The UAE’s investment profile has diversified in recent years beyond services-led activity, which has historically dominated capital flows, and towards automotive manufacturing, real estate, transportation and warehousing.

It is targeting advanced manufacturing, AI, clean energy and life sciences, which Alsuwaidi said are the most contested sectors in the world.

“They demand talent, technology and regulatory agility at a level that no country can take for granted,” he said.

The UAE attracted $48.3 billion in inbound FDI in 2025, a record high according to a new report released by the Ministry of Investment, with greenfield investments dominating inflows.

The US and India together have accounted for nearly half of all cumulative capital expenditure in these projects since 2021. Last year, greenfield FDI generated more than 65,000 jobs, an estimated 31 percent rise from the year before.

“What matters most is what that capital builds, enables and leaves behind once deployed,” Alsuwaidi said.

Automotive manufacturing accounted for 30 percent of greenfield capital expenditure last year, driven by a planned $10 billion manufacturing hub in Ras Al Khaimah with India’s Rana Group.

Communications represented 29 percent, underpinned by Stargate UAE – a $500 billion AI infrastructure venture led by OpenAI, Japanese tech investor SoftBank, US tech company Oracle and Abu Dhabi-backed MGX. Real estate accounted for 7 percent, supported by continued wealth migration.

Foreign capital only tells part of the story. Domestic direct investment in the UAE is estimated at more than $119 billion, about 2.5 times the value of annual FDI inflows.

“This is a powerful expression of confidence from those with the closest understanding of the UAE’s operating environment, demand base and long-term growth outlook,” he said.

Last year the government approved a $10 billion National Investment Fund, which assigns funds to projects to incentivise FDI, while the Ministry of Investment continues to expand bilateral investment partnerships as part of its National Investment Strategy 2031.

Further reading:

• UAE leads US and Britain as top FDI investor in Qatar
• Iran war threatens to undermine Saudi FDI efforts
• Gulf FDI rose in 2025 but war puts outlook at risk

Although Alsuwaidi refused to speculate on the impact of the Iran-US war on FDI, he believes long-term investors continue to distinguish between geopolitical shocks and structural competitiveness.

Since the war began, US private investment company Bain Capital opened its regional office in ADGM, Abu Dhabi’s finance centre, in April. Wealth manager Capital Group has chosen the same location for its first Middle East office.

In May Global Infrastructure Partners, part of BlackRock, announced a partnership with Abu Dhabi sovereign fund L’imad, energy group Adnoc and Singapore sovereign wealth fund Temasek to target $30 billion of infrastructure investment across Abu Dhabi.

But the minister says that any perception issues about the UAE, especially among new investors, are misguided.

“In a crowded global market for capital, the challenge is to keep closing the gap between what investors assume about our region and what the UAE actually offers,” he said.

“The UAE’s answer is to remain what it has always been: a bridge between East and West and a launchpad for capital seeking certainty.”