Happy Friday everyone!

The Gulf’s biggest stories are moving fast. The US has cleared the way for a potential $24.3 billion F-35 sale to Saudi Arabia, a deal that could reshape regional defense dynamics. UAE-backed OpenAI is reportedly in talks with investors over a new funding round that could value the ChatGPT maker at around $1.2 trillion. And in Dubai, the long-delayed Pearl project is showing signs of life, with Accor close to signing a deal as the site returns to development more than two decades after it was first announced.

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US Clears Way For $24.3 Billion F-35 Sale To Saudi Arabia

What Happened

The US State Department has approved a potential $24.3 billion sale of 48 Lockheed Martin F-35 fighter jets to Saudi Arabia. The package would also include 49 Pratt & Whitney engines, communications equipment, spare parts and support. The deal still requires approval from Congress. Saudi Arabia has pursued the stealth fighters for years as it seeks to modernize its air force and strengthen its defenses against regional threats.

Why It Matters

The potential sale would mark a significant shift in US policy toward Riyadh and could affect the military balance in the Middle East. Washington has traditionally assessed regional arms sales against its commitment to maintaining Israel’s “qualitative military edge.” Israel is currently the only Middle Eastern country operating the F-35, which uses stealth technology to reduce detection.

What's Next

Congress will now have an opportunity to review the proposed sale, potentially creating a hurdle given previous scrutiny of US arms deals with Saudi Arabia. Riyadh has welcomed the proposal as another step in its strategic defense partnership with Washington. The deal comes as the Trump administration deepens defense cooperation with Saudi Arabia, following a nearly $142 billion US-Saudi arms package agreed in 2025.

UAE-Backed OpenAI Eyes $1.2 Trillion Valuation Ahead Of IPO

What Happened

UAE-backed OpenAI is in talks with major investors to raise fresh capital at a valuation of around $1.2 trillion, according to the Financial Times and Reuters. The discussions come months after OpenAI raised $122 billion at an $852 billion valuation. Abu Dhabi-based MGX, which is backed by Mubadala and G42, was a co-lead investor in that March funding round.

Why It Matters

A $1.2 trillion valuation would represent a sharp increase from OpenAI’s $852 billion valuation in March. The new funding would give the ChatGPT maker additional capital as it expands AI models, products and computing infrastructure. MGX’s participation highlights the UAE’s growing financial role in the global AI industry, with the Abu Dhabi investor having made multiple investments in OpenAI.

What's Next

OpenAI is weighing the funding as it prepares for a potential public listing, although the timing remains uncertain. CEO Sam Altman has previously said the company would not go public in 2026, citing concerns around AI safety. Any new funding round would come as OpenAI continues investing heavily in computing capacity while facing competition from rivals including Anthropic.

Dubai Pearl Site Roars Back To Life With Accor Deal In Sight: AGBI

What Happened

Activity is picking up at Dubai Pearl, the long-delayed mega-development in Al Sufouh, more than 20 years after it was first announced. Accor is close to signing a deal, potentially by the end of 2026 or early 2027, according to its regional CEO Duncan O’Rourke’s revelation to AGBI. He said the new masterplan is about twice the size of the original project. The site is now owned by Dubai Holding.

Why It Matters

Dubai Pearl was originally planned as a 20-million-square-foot development with seven five-star hotels, a 73-storey tower, more than 60 restaurants and a theatre. Construction stalled in 2006 after multiple ownership changes and the 2008 financial crisis. The site was eventually cleared in 2024 after the unfinished structures were demolished.

What's Next

Accor is exploring opportunities at the site, although O’Rourke said he has not heard that the group will operate the anchor hotel. Its lifestyle division, Ennismore, and luxury brands including Raffles, Fairmont and Sofitel are being considered. Dubai Holding has yet to comment on the project’s revival or whether it will retain the Dubai Pearl name.

👨‍💻From Smashi Business’ Desk

• Dubai based The Giving Movement CEO Rania Masri El Khatib has spoken out after Macklemore was removed from Ed Sheeran’s US tour following his support for Palestine.

• The Glazer family, Manchester United's majority owners, are reportedly among the parties circling a potential takeover of Saudi giants Al-Ittihad.

• A reported five-man consortium lead by Cristiano Ronaldo is pushing a joint bid to buy Al-Nassr from PIF, with a $100M minimum buy-in per partner.

• The Israeli Air Force has used Apple’s newly unveiled iPhone Duo in an Instagram post featuring Israeli soldiers in Gaza, with the images displayed across the foldable phone under the headline “This is Duo”

🔍In other news…

• OpenAI targets $1.2 trillion valuation in new investor funding round

• Iran war cost hits $38 billion, forecast to rise $3 billion a month, CBO says

• Trump administration plans $2.8 billion munitions sale to Israel, sources say

• Lebanese Carlos Ghosn, the former Nissan Motor Co. chief executive officer, is on trial in Paris

• Saudi Arabia has ‘paused Red Sea oil exports’

🦄 World of Startups

• Saudi Arabian building materials platform BRKZ has secured $31 million in new funding

• Saudi digital payments company Barq has raised $329.5 million in a Series A round, valuing the fintech at $1.85 billion.

• ChatFeatured, Canada-based AI startup, raised $2M in a pre-seed funding round from BY Venture Partners (UAE/Lebanon) and other global investors

• Doctorbook, Syria-based healthtech platform, raised $16K in a pre-seed funding round from a group of angel investors, valuing the startup at $200K

• Carbar, Australia-based car subscription platform, is merging with Carasti, UAE-based car subscription business operating across the UAE, Saudi Arabia, Thailand, and Singapore, at a combined pre-raise valuation of $74M

• Fincart, Egypt-based eCommerce enablement platform, raised $2.8M in a seed funding round

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