“Davos In The Desert” Recap

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“Davos In The Desert” Recap

Say what you will about the Saudis, but one has to admit they aren’t afraid of a little grim irony. During a corruption crackdown last year, the government housed scores of royals and high profile businesspeople in a makeshift jail at the Riyadh Ritz-Carlton hotel. This week, the same venue hosted the second annual Future Investment Initiative conference.

Since many high profile US executives chose to pass on attending this year because of the controversy over the murder of journalist Jamal Khashoggi, the event itself didn’t get as much press here in America. Well, that and the recent market volatility took up a lot of oxygen….

Still, the conference appears to have been well enough attended, which signals that the Kingdom is not as marginalized as one might think. From a tech-disruption perspective, this is important. For example, the KSA represents almost half the capital in Softbank’s Vision Fund, which at $93 billion is the largest VC fund in the world.

A few articles on the event worth your time, and our summary of each:

From the Asia Times, citing local sources:

  • The KSA announced it had signed $50 billion of investment deals at the conference, with companies like Total, Halliburton, Hyundau, Trafigura, Norinco, Schlumberger and Baker Hughes.
  • French oil company Total made it a point to be visible at the conference, with their CEO saying “We see what partnership means when you have difficult times”. Total has plans for a retail network in the Kingdom in partnership with Saudi Aramco.
  • The article mentions that Russian and Chinese delegations attended the conference, and we don’t recall seeing any notices of cancellations among their delegations.

Article: http://www.atimes.com/article/riyadh-touts-50-bn-in-deals-at-davos-in-the-desert/

From Bloomberg reporting, via Fortune magazine:

  • Saudi Energy Minister Khalid Al-Falih addressed the Khashoggi killing in his formal remarks: “From the leadership on down, we’re very upset about what has happened, and of course the King has made it clear that there will be an investigation, justice and retribution.”
  • There was a car on display from Lucid Motors – a Tesla competitor in which the Saudis have invested – at the conference. Of note: the Saudis have invested in Tesla and were, of course, where Elon Musk thought he would be getting his go-private money.

Article: http://fortune.com/2018/10/24/saudi-arabia-future-investment-initiative/

And lastly, an excellent article from Recode on the often secretive relationship between US venture capital and Saudi money:

  • Our favorite line of this piece: “People have to pull out of the conference for optics. But they can basically accept the capital and say, ‘Oh well, we’ll let you be an investor, but you can’t tell anyone’,” said one person tracking the Saudi footprint in Silicon Valley. “It’ll basically mean that everything is more discreet and under the sheets.”
  • The key message: there are so many pockets of Saudi money, and participation in venture capital funds is so secretive, that the current controversy will do little to slow investment.

Article: https://www.recode.net/2018/10/24/18020282/saudi-arabia-silicon-valley-investors-venture-capital-money