(May 5): Officials in Abu Dhabi have held preliminary talks on creating a new defence-focused investment vehicle, people familiar with the matter said, as part of the United Arab Emirates’ (UAE)push to further bolster its capabilities in the wake of regional conflicts.
The move aims to centralise efforts to build stakes in global defence manufacturers and expand domestic production, the people said, asking not to be identified as the matter is private. The talks have involved top officials and executives in Abu Dhabi, including Crown Prince Sheikh Khaled bin Mohammed Al Nahyan and Mubadala Investment Co chief executive officer Khaldoon Al Mubarak, some of the people said.
The new vehicle is likely to be mandated with taking stakes in defence companies worldwide to diversify supplies for the UAE. Investments could span established firms in Europe and the US, Ukrainian and Turkish drone manufacturers, as well as venture-style bets on niche technologies, the people said.
With wealth funds that control close to US$2 trillion, Abu Dhabi ranks among the world’s wealthiest cities — and one that’s already known for splashing billions of dollars into sectors ranging from finance to artificial intelligence (AI).
The emirate’s latest push could potentially add a deep-pocketed buyer to the defence sector where firms are already benefitting from increased spending around the world.
Deliberations on the structure and strategy of the new Abu Dhabi initiative remain at an early stage, and the entity may ultimately not materialise. Representatives for the Ministry of Foreign Affairs, the Executive Affairs Authority and the Abu Dhabi Media Office did not respond to requests for comment. Mubadala declined to comment.
See also: US-Iran ceasefire holds after Hormuz clashes and UAE strikes
Discussions have centered around keeping the vehicle outside the orbit of Abu Dhabi’s three sovereign wealth funds and existing defence firms, the people said. The emirate has created similar platforms in the past, including MGX for AI and Judan, a US$237 billion financial-services holding company.
Some of these have emerged as prolific dealmakers. Mubadala alone spent US$39 billion in 2025 while, MGX plans to deploy as much as US$10 billion annually over the next few years.
Abu Dhabi’s move mirrors a push by other governments. The European Union, for instance, has called for a new era of rearmament in the region with Russia’s increasingly entrenched war in Ukraine and persistent signals from the US that it’s cooling on Nato.
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That’s prompted owners of military assets to rush to market, while private equity firms have either been raising funds or putting together teams dedicated to investing in companies that help underpin national security.
The UAE is already a major arms buyer, accounting for 2.7% of global imports between 2021 and 2025, according to a March report by the Stockholm International Peace Research Institute. It has built an advanced arsenal including Patriot and THAAD missile systems, F-16 fighter jets and Black Hawk helicopters, according to SIPRI’s database, with the US, France and South Korea among its main suppliers.
In rare public remarks early in the war, President Mohammed bin Zayed warned against mistaking the country’s prosperity for weakness, saying, “the UAE has thick skin and bitter flesh, we are no easy prey.”
The discussions in Abu Dhabi come against a backdrop of multiple regional conflicts over the last several years that have impacted at least a dozen countries. On Monday, the tentative ceasefire that had been in place since early April was jolted as the US and Iran exchanged fire in clashes that also drew in the UAE.
And late last month, the UAE decided to leave Opec, the clearest signal yet that it will assert its ambitions and forge its own political and security alliances.
During the Iran war that began in February, Gulf states had to contend with thousands of drones and missiles over many weeks. Tehran targeted the UAE more than any other country in its retaliation for the conflict started by the US and Israel, though the vast majority of the projectiles were intercepted by a multi-layered air defence system.
In March, Washington fast-tracked the sales of up to US$16.5 billion of air-defence systems, radars and missiles to Middle Eastern allies, including the UAE and Kuwait. Ukraine has also struck defence agreements with some Gulf states, drawing on anti-drone capabilities honed over four years of countering Russian attacks.
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Abu Dhabi has also pushed to build up its domestic defense industry and reduce reliance on foreign equipment. In 2019, it created EDGE Group PJSC by consolidating more than 25 entities and turned it into the nation’s largest weapons manufacturer, with annual revenue of around US$5 billion.
In November, EDGE said it would invest US$200 million in a drone joint venture with US-based Anduril Industries Inc and prioritise the development of air-defence systems. Its chairman Faisal Al Bannai recently travelled to the US and held meetings with, among others, President Donald Trump and the co-founders of venture firm Andreessen Horowitz.
Speaking at an event in Abu Dhabi on Monday, Al Bannai, who is also an adviser to the UAE president, said 85% of the drones that targeted the country during the Iran war were neutralised using domestically built jammers. “Local defence capability truly proved its worth during this war,” he said.
Other government-linked bodies are also stepping up efforts to strengthen the domestic defence ecosystem. On Tuesday, the Tawazun Council for Defense Enablement signed agreements with South Korea’s LIG Defense & Aerospace Co to develop a manufacturing hub, and with Lockheed Martin Corp to establish a cybersecurity centre in the UAE.
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