Abu Dhabi-backed MGX joins Nvidia, Microsoft in funding AI infra surge with sovereign capital

MGX, a name barely whispered in Silicon Valley a year ago, just shoved its way into the room where the real AI deals are being made after being born from the oil-rich ambitions of Abu Dhabi’s sovereign wealth fund just a little over a year ago.

This week, MGX stamped its name onto the largest data center deal in history, a $40 billion takeover of Aligned Data Centers, a company that builds and runs hyper-scale infrastructure across North and South America. They’re not doing it alone. Elon Musk’s xAI, Microsoft, BlackRock, and Nvidia are all in.

In September, MGX made another big splash, joining Oracle and Silver Lake in President Donald Trump’s push to get TikTok under U.S. control.

MGX invests in record $40 billion Aligned Data Centers deal

This week, MGX entered another huge move, taking part in a $40 billion acquisition of Aligned Data Centers, marking the largest data center transaction ever recorded. The buyer group includes Nvidia, Microsoft, BlackRock, and Elon Musk’s xAI. Aligned, which operates across North and South America, designs and runs facilities used by hyper-scalers and cloud providers. For MGX, this purchase ties directly into its participation in the AI Infrastructure Partnership (AIP), a $100 billion collaboration between Microsoft, BlackRock, and others aimed at expanding U.S. data center capacity for AI workloads.

Microsoft had already invested $1.5 billion in G42, MGX’s founding partner, to help develop regional AI capabilities in the Middle East using the Azure cloud platform. These partnerships create a global circuit between U.S. and Gulf capital, where sovereign-backed funds feed the massive energy and hardware requirements of generative AI systems.

Patrick Moorhead, founder of Moor Insights & Strategy, said that U.S. firms are now working with Middle Eastern investors partly to keep them from financing China instead. “I believe in the Middle East … we either provide the goods or they will go to China,” Moorhead said. He added that MGX is following a similar path as Saudi Arabia’s Public Investment Fund, which is using its oil wealth to diversify into advanced technology. “The amount of capital required is astronomical,” Moorhead said. “And they’re willing to take the risks.”

Venture capital turns to sovereign funds amid fundraising crunch

The current market has made it hard for startups to raise capital. “I think they will find real acceptance among VCs because people are comfortable with sovereign wealth,” said Bradley Tusk, a venture capitalist and co-founder of Tusk Capital Partners. “This is a tough fundraising environment, so they’re a potentially good source of capital.”

Still, Tusk warned that MGX’s growing alignment with Trump’s circle could expose it to political backlash if the White House changes hands. “The biggest risk is that the only narrative right now is they are Trump’s friends,” Tusk said. With Trump back in office, MGX’s political positioning could become both a strength and a liability depending on who holds power in Washington.

For now, companies chasing compute are taking the money. Even tech giants like Amazon, Meta, and Microsoft are renting GPU capacity from firms such as CoreWeave instead of financing all their own facilities. MGX’s arrival simply gives them one more path to build faster. And in a world where AI infrastructure is measured in billions, every dollar—no matter where it comes from—now decides who dominates the next era of computing.