Global Turmoil Drives Wealthy Nations to Splurge Sovereign Funds on Strategic Assets

The world is being hit by successive shocks. Amid the Russia-Ukraine war, bloodshed erupted in the Middle East following Israel’s invasion of Palestine in October 2023. The conflict subsequently widened to involve Israel and the US against Iran, as well as Israel against Lebanon. Not to mention the increasingly heated technology ‘war’ between the US and China, the world’s two largest economies, which is also causing global anxiety. This ‘chaotic’ and uncertain global condition is triggering a new phenomenon. Many wealthy countries are allocating sovereign wealth funds (SWFs) to strategic national priorities, ranging from resilient infrastructure to key domestic industries, alongside pursuing investment returns. This was revealed by a study from IE University in Spain released on Friday. The study found that SWFs managing more than $15 trillion are playing a major role in funding artificial intelligence (AI), as governments view AI and semiconductors as strategic assets. ‘The current fragmented world has had an impact,’ said Javier Capapé, the report’s editor and director of SWF research at IE University. ‘SWFs are increasingly being used by governments to execute national strategies and build stronger positions in global value chains,’ he added. The study also indicated a shift towards larger-value deals. Although the number of direct investments fell 17% compared to the previous reporting period to 391 transactions, the total investment value soared 91% to $404 billion compared to the university’s 2024 report. Capapé noted that AI-related investments accounted for roughly a third of the total investment value monitored in the study, with giant companies such as Stargate, OpenAI, and Databricks attracting capital from SWF investors with a long-term investment vision. Recent deals include Abu Dhabi-based MGX’s backing of OpenAI, funding for xAI from MGX, the Qatar Investment Authority, and the Oman Investment Authority, as well as the participation of QIA and Singapore’s GIC in Anthropic’s $13 billion funding round. The US attracted the largest share of investments at $220.4 billion, driven by a strong focus on AI. However, Capapé stated that the study, which monitored direct investments over the 18 months to December 2025, only covers the ‘tip of the iceberg’, as many SWF investments are not publicly disclosed. Energy-rich nations, including Middle Eastern countries and Norway, were recorded as major investors, though Singapore’s Temasek led in terms of deal volume with a total of 71 transactions. The report tracked 12 new investment funds, including MGX and funds in Ireland, the UK, Botswana, and Spain. Capapé said this trend reflects a growing interest in leveraging state capital to make strategic investments and expand influence abroad. ‘Non-market factors now carry more significance than at any period since the end of the Cold War,’ Capapé stated. ‘We are entering a new paradigm, and sovereign wealth funds have become part of that change,’ he concluded.