Jack Selby Warns Middle East Pullback Could Hit AI Investments
Jack Selby, managing director at Peter Thiel's family office Thiel Capital, told CNBC that Middle East investors account for roughly a quarter of global investments committed to AI over the next five years. CNBC reports Selby said a prolonged war in Iran could prompt the United Arab Emirates, Saudi Arabia and other regional actors to redirect capital toward reconstruction, which could drain "hundreds of billions of dollars" from the AI boom and disrupt data center projects as well as public and private tech companies. CNBC also reports Selby is launching a second fund at his Arizona-based VC, Copper Sky, targeting tech firms outside California, New York and Massachusetts.
What happened
CNBC reports that Jack Selby, managing director at Peter Thiel's family office Thiel Capital, told CNBC that Middle East investors, including sovereign wealth funds and government entities, account for roughly a quarter of global investments committed to AI over the next five years. CNBC reports Selby said a prolonged war in Iran could lead the United Arab Emirates, Saudi Arabia and other countries to divert investment toward rebuilding, a move he warned could remove "hundreds of billions of dollars" of capital from AI-related projects and threaten data center builds and tech company financing.
Technical details
Industry context
Investors and infrastructure projects in AI depend on large-scale capital for data center construction, bespoke cooling and networking, and long lead-time procurement. Large sovereign commitments often fund early-stage capex that reduces financing risk for both public and private operators. Reduced capital availability typically lengthens project timelines and raises borrowing costs for infrastructure and adjacent startups.
Context and significance
Editorial analysis: Reporting frames Selby's remarks as a reminder that geopolitical shocks can alter the supply of patient, large-scale capital supporting AI infrastructure. For practitioners, constraints on capex availability can cascade into longer deployment schedules for GPU farms, higher unit costs for colocations, and a narrower pool of funded early-stage AI companies that require substantial capital before revenue.
What to watch
Industry context
Monitor announced slowdowns or cancellations of hyperscale or regional data center projects, public disclosures from large cloud and colo providers, and fundraising patterns for AI startups. Observers should also watch sovereign wealth fund disclosures and public statements from UAE and Saudi investment vehicles for any formal reprioritization of capital.
Reported investor action
CNBC reports Selby said his own approach is to avoid crowded markets; CNBC reports he is launching a second fund at Copper Sky, his Arizona-based VC fund, which targets tech firms outside California, New York and Massachusetts.
For practitioners
Editorial analysis: Companies and engineers planning capacity expansions or infrastructure-dependent experiments should track funding flows and project finance announcements, as changes in large sovereign capital availability can materially affect timelines and vendor selection choices.
Scoring Rationale
The story highlights a plausible, near-term funding risk to AI infrastructure and venture financing that practitioners should monitor. It is notable but not industry-shaking, as it speaks to capital flow risk rather than a technical or regulatory paradigm shift.
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