Why did Binance raise $2 billion in funding with the UAE royal family?

Author: flowie, ChainCatcher

Just now, Abu Dhabi's state-owned capital MGX announced a US$2 billion investment in Binance. This is MGX's first investment in Crypto, and Binance's first time accepting institutional investment. It is also the largest single investment in the crypto field so far.

What’s even more interesting is that MGX has a great background. It not only manages a hundred billion US dollars in capital, but also gathers the most powerful and richest royal members and "rich" in the UAE.

After taking a heavy investment in AI, what is the point of MGX's goal at Crypto? Why did Binance, which has never been short of money, win a huge investment this time?

After gambled for ****AI by hundreds of billions of dollars,

UAE**** royal capital aims at Crypto

MGX (MetaGPT X) is established for just one year and is jointly formed by the Abu Dhabi Artificial Intelligence and Advanced Technology Committee (AIATC) in conjunction with Abu Dhabi sovereign wealth fund Mubadala and UAE tech giant G42. The assets managed by MGX are expected to exceed US$100 billion.

MGX can be said to be one of the most important strategic capitals for the UAE to promote economic diversification, and it also brings together a top lineup in the fields of politics, economy, technology, etc.

MGX's board chairman is Sheikh Tahnoon bin Zayed Al Nahyan, the son of the founder of the UAE and the younger brother of the current UAE president. He is also the deputy chief of Abu Dhabi and national security adviser.

Most of the UAE sovereign fund is basically in Tahnoon's hands. He is in charge of the Abu Dhabi Investment Authority (ADIA), which mainly invests overseas and has a scale of 853 billion US dollars, and the Abu Dhabi Developmental Holding Company (ADQ), which mainly invests domestically and has a scale of 110 billion US dollars.

Khaldoon Khalifa Al Mubarak, vice chairman of the MGX board of directors and investment strategist, is the CEO of Mubaradara, one of the three major sovereign wealth funds in the UAE. Mubadala has over US$300 billion in assets under management, which can be said to be the other half of the Abu Dhabi sovereign fund. MGX's CEO is also part-time Ahmed Al Idrissi, the leader of the Mubadala direct investment department.

MGX's board of directors also includes Jassem Al Zaabi, Vice Chairman of the Central Bank of the United Arab Emirates, and Xiao Peng, CEO of G42.

It is worth mentioning that the G42 is one of the most important technology giants in the UAE, focusing on fields such as artificial intelligence, cloud computing, healthcare and cybersecurity. For example, G42 developed the most advanced large-scale Arabic language model "Jais" in the Middle East; G42 Cloud is one of the largest cloud computing platforms in the Middle East. It has a very high strategic position in the UAE and is regarded as the "gem in the crown of the UAE.

With a capital of hundreds of billions of dollars and a top-level lineup, what do MGX want to invest in?

According to public information from the Abu Dhabi government, MGX's investment strategy will focus on the following three areas: artificial intelligence infrastructure, semiconductors and meeting core technologies and applications of artificial intelligence.

MGX has participated in OpenAI's latest round of financing, partnered with BlackRock, Global Infrastructure Partners (GIP) and Microsoft to launch a $30 billion fund focusing on the construction of data centers and their powered energy; in addition, it has participated in the "Star Gate" artificial intelligence investment project announced by President Trump.

After a heavy investment in AI and semiconductors, MGX officially entered the cryptocurrency and blockchain field for the first time through investment in Binance, which may indicate that the UAE royal funds will promote the widespread adoption and compliance development of digital assets through investment.

For encryption, the richest national capital may bring huge pumps to crypto, which will accelerate the global application of blockchain technology and enhance market confidence and compliance.

****Why did Binance, which is not short of money, get a huge investment

at this time?****

As the largest crypto exchange, Binance is not short of money.

In 2021, after refusing to invest in Sequoia Capital, Zhao Changpeng made it clear that Binance does not need external funds and he is only interested in working with venture capital companies that can help exchanges cooperate with regulators and obtain operating licenses.

Four years later, Binance took over US$2 billion of UAE's state-owned capital. What is its intention?

Finding a local umbrella may be one of the purposes. Under the pressure of crypto-regulatory compliance, Binance is displaced and has been able to settle in Dubai after being "exiled" by China, Tokyo and Singapore.

Crypto KOL AB Kuai.Dong said that the significance of this investment is far greater than the funds themselves. "The official entry of the UAE is equivalent to inviting many top global political capitals to become supporters of Binance."

Under pressure from all parties such as compliance, being in line with the National Power Center is also one of the trends for crypto companies. In AB Kuai.Dong's view, compared with the power changes in North America every four years, the UAE, Saudi Arabia, Bahrain and Qatar are all super stable existences.

In order to seek compliance and policy support, it is not difficult to understand the UAE official, but why the amount is as high as US$2 billion and where this part of the equity was sold has caused some speculation.

In November last year, Bloomberg reported that Zhao Changpeng received a offer to sell his controlling stake in the exchange - these equity constituted the majority of his personal net assets, but he refused to disclose who the buyer was and did not disclose the price. Twitter users speculated that it might be from the shares held by Zhao Changpeng's family through him, but no more public information has been disclosed yet.

However, in any case, it is an extremely important historical node for Binance or the crypto field.