Ernst & Young: Kuwait Among Top Sovereign Investors in 2026 AI Boom
- $430 billion in venture capital invested in the sector during the first six months
- H1 2026 investments equal four times the volume of 2023
- $2.9 trillion directed toward data centers and chips from 2025 to 2028
- The question of the next decade: Who possesses the capacity to fund and build AI infrastructure within institutions?
Kuwait has emerged among sovereign wealth funds expected to inject investments exceeding $100 billion into artificial intelligence and digital transformation sectors in 2026, as global investments in this field reached unprecedented record levels.
According to a report issued by the professional services and consulting firm Ernst & Young (EY) in Ireland, global venture capital investments in the sector reached approximately $430 billion during the first half of 2026, surpassing the total investments recorded for all of 2025, which amounted to $254 billion.
The report, which covers investment trends in artificial intelligence, noted that H1 2026 investments equal approximately four times the total investments recorded in 2023, coinciding with the launch of a major wave of generative AI investment. This reflects a noticeable acceleration in the pace of funding, despite ongoing concerns about the potential formation of an investment bubble in the sector.
An analysis prepared by EY’s Technology, Media, and Telecommunications team in Ireland clarified that spending in the second quarter of the year, spanning April to June, alone exceeded the total investments recorded throughout 2025.
It is expected that spending by major technology companies with massive cloud infrastructure, such as Amazon, Alphabet, and Meta, will range between $490 billion and $520 billion in 2026 alone. These levels place the sector on a trajectory toward annual spending nearing $1 trillion, a benchmark that was viewed just two years ago as a projection likely to be achieved within a period of 3 to 5 years.
In the same context, investments directed toward data centers, advanced chips, interconnection networks, and cloud capabilities are expected to reach $2.9 trillion during the period from 2025 to 2028, with an increasing share of funding allocated to the foundational infrastructure and assets required to develop and operate AI.
Regarding sovereign investments, forecasts indicate that sovereign wealth funds will inject more than $100 billion into AI and digital transformation sectors this year, compared to approximately $66 billion last year. Middle Eastern funds lead a significant portion of this trend, notably the Abu Dhabi-based Mubadala Investment Company, alongside the Public Authority for Investment and the Qatar Investment Authority.
This trend reflects the growing importance of AI and digital transformation within the long-term investment strategies of sovereign wealth funds, amid intensifying global competition to possess the infrastructure and technical capabilities required for the next phase.
At the level of funding rounds, capital concentration continued among a limited number of companies. Only four major deals accounted for more than 40 percent of the total transaction value during the first half of 2026. Advanced AI model development companies dominated the landscape, led by OpenAI, Anthropic, and xAI, after raising combined funding totaling $172 billion.
Venture capital funding directed toward semiconductor companies also maintained its strength, with approximately $5 billion invested across 84 deals in the first quarter of 2026, marking the sector’s second-strongest quarterly performance ever.
Griet Young, Partner and Head of Technology, Media and Telecommunications at EY Ireland, stated that the ongoing debate about the possibility of an AI bubble has not prevented investment flows from continuing at an accelerating pace.
She noted that venture capital investment in generative AI during one of the recent quarters exceeded the total investments recorded in 2025, explaining that the sector is currently approaching annual spending levels that were believed two years ago would only be achieved within a three- to five-year timeframe.
She added that the main driver of this acceleration is the rapid maturation of the sector, as investment is no longer limited to developing advanced models and consumer applications, but is increasingly directed toward infrastructure, digital sovereignty, and energy. She emphasized that the continued development of AI requires sustained investment in infrastructure, as countries and economic blocs increasingly focus on ensuring they possess the necessary technical and sovereign capabilities.
She observed that the most critical question over the next decade may not be solely about who develops the most efficient models, but rather who has the ability to fund and build the computational and technical infrastructure upon which AI deployment in enterprises depends, and to ensure sovereign control over it.
The report pointed out that interest in the concept of sovereign AI is clearly increasing in Europe, where the regulatory and political environment concerning cross-border technology deals, particularly in cloud services and infrastructure, is undergoing rapid changes.
Regulators in an increasing number of countries are showing readiness to intervene when deals affect strategic technological assets or impact competition or critical infrastructure.
The European Union has adopted a set of initiatives aimed at developing local infrastructure and coordinating large-scale investments in what are known as AI factories, alongside increasing funding for AI research through the Horizon Europe program, with the goal of raising annual investment to more than €3 billion.
These policies have begun to yield tangible results, with direct funding for European AI companies reaching €21.3 billion during the first five months of 2026, surpassing the total funding recorded in 2025. These companies accounted for approximately 40 percent of the total venture capital deals on the continent.
