Geopolitical shifts drive sovereign funds towards national priorities, study finds

By Libby George

LONDON, July 10 (Reuters) - Shifting geopolitical alliances are pushing sovereign wealth funds to place greater emphasis on strategic national priorities — from resilient infrastructure to key domestic industries — alongside investment returns, a study released on Friday showed.

The study by Spain-based IE University found sovereign wealth funds managing more than $15 trillion are playing a growing role in funding artificial intelligence as governments increasingly treat AI and semiconductors as strategic assets.

"This fragmented world has had an impact," said Javier Capapé, editor of the report and director of sovereign wealth research at IE University. "Sovereign wealth funds are more and more used by governments to deploy national strategies, develop stronger positions in the global value chains."    

The study also showed a shift towards larger deals. While the number of direct investments fell 17% from the previous reporting period to 391 transactions, total spending jumped 91% to $404 billion compared with the university's 2024 report.

Capapé said AI-related investments accounted for about one-third of the spending tracked by the study, with companies such as Stargate, OpenAI and Databricks attracting capital from sovereign investors with long-term investment horizons.

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, and participation by QIA and Singapore's GIC in Anthropic's $13 billion funding round.

The U.S. attracted the largest share of investment at $220.4 billion, helped by the strong focus on AI. However, Capapé said the study, which tracked direct investments over the 18 months to December 2025, captured only "the tip of the iceberg" because many sovereign fund investments are not publicly disclosed.

Energy-rich nations, including Gulf states and Norway, were big spenders, but Singapore's Temasek led by deal volume with 71 transactions.  

The report tracked 12 new funds, including MGX as well as funds in Ireland, Britain, Botswana and Spain. Capapé said the trend reflected growing interest in using state capital to pursue strategic investments and expand influence abroad.

"Non-market factors are having more importance than ... in any period since the end of the Cold War," Capapé said. "We are entering into a new paradigm, and sovereign wealth funds have been part of that change."

(Reporting by Libby George. Editing by Mark Potter)