Gulf capital emerges as shock absorber for AI valuations

With global equity valuations stretched by the artificial intelligence boom, Gulf sovereign and institutional investors are increasingly acting as the market's shock absorbers, sustaining AI-driven valuations and private deal activity through long-term, patient capital, according to Standard Chartered's Global Market Outlook 2026.

- Issac John

Aveeva Abbas, managing director and chief investment officer at Gulf Capital. Gulf Capital is increasingly acting as the shock absorber for AI valuations.

(Staff file)

The bank's Wealth Solutions Chief Investment Office argues that while investor unease over a potential AI-led equity bubble is understandable, today's market conditions differ sharply from the leverage-fuelled excesses that preceded the 2008 global financial crisis. Instead, the closer historical parallel is the late-1990s dotcom cycle, albeit with two decisive differences: the sheer scale of capital being deployed into AI infrastructure, and the fact that many of the largest investors and developers are already profitable, cash-generative institutions.