Business

What Eric Xing’s Abu Dhabi project says about the next phase of AI power

Published

5 months ago

July 22, 2025

Hello and welcome to Eye on AI…In this edition: my chat with AI leader Eric Xing…Trump’s AI export plan…drama at the International Math Olympiad…Stargate update…transparency in reasoning.

I was excited and curious to meet Eric Xing last week in Vancouver, where I was attending the International Conference on Machine Learning—one of the top AI research gatherings of the year. Why? Xing, a longtime Carnegie Mellon professor who moved to Abu Dhabi in 2020 to lead the public, state-funded Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), sits at the crossroads of nearly every big question in AI today: research, geopolitics, even philosophy.

The UAE, after all, has quietly become one of the most intriguing players in the global AI race. The tiny Gulf state is aligning itself with U.S.-style norms around intellectual freedom and open research—even as the AI rivalry between the U.S. and China becomes increasingly defined by closed ecosystems and strategic competition. The UAE isn’t trying to “win” the AI race, but it wants a seat at the table. Between MBZUAI and G42–its state-backed AI-focused conglomerate–the UAE is building AI infrastructure, investing in talent, and aggressively positioning itself as a go-to partner for American firms like OpenAI and Oracle. And Xing is at the heart of it.

As it happened, Xing and I just missed each other—he arrived in Vancouver as I was heading home—so we connected on Zoom the following day. Our conversation ranged widely, from the hype around “world models” to how the UAE is using open-source AI research as a strategic lever to build soft power. Here are a few of the most compelling takeaways:

A ‘Bell Labs plus a university‘

MBZUAI is just five years old, but Xing says it’s already among the fastest-growing academic institutions in the world. The school, which is mostly a graduate program for AI researchers, aspires to compete with elite institutions like MIT and Carnegie Mellon while also taking on applied research challenges. Xing calls it a hybrid organization, similar to “Bell Labs plus a university,” referring to the legendary R&D arm of AT&T, founded in 1925 and responsible for foundational innovations that shaped modern computing, communications, and physics.

The UAE as a soft-power AI ambassador

Xing sees MBZUAI not just as a university, but as part of the UAE’s broader effort to build soft power in AI. He describes the country as a “strong island” of U.S. alignment in the Middle East, and views the university as an “ambassador center” for American-style research norms: open source, intellectual freedom, and scientific transparency. “If the U.S. wants to project influence in AI, it needs institutions like this,” he told me. “Otherwise, other countries will step in and define the direction.”

The U.S. isn’t losing the AI race

While much of the public narrative around AI focuses on a U.S.-China race, Xing doesn’t buy the framing. “There is no AI war,” he said flatly. “The U.S. is way ahead in ideas, in people, and in the innovation environment.” In his view, China’s AI ecosystem is still constrained by censorship, hardware limitations, and a weaker bottom-up innovation culture. “Many top AI engineers in the U.S. may be of Chinese origin,” he said, “but they only became top engineers after studying and working in the U.S.”

Why open source matters

For Xing, open source isn’t just a philosophical preference—it’s a strategic choice. At MBZUAI, he’s pushing for open research and open-source AI development as a way to democratize access to cutting-edge tools, especially for countries and researchers outside the U.S.-China power centers. “Open source applies pressure on closed systems,” he told me. “Without it, fewer people would be able to build with—or even understand—these technologies.” At a time when much of AI is becoming siloed behind corporate walls, Xing sees MBZUAI’s open approach as a way to foster global talent, advance scientific understanding, and build credibility for the UAE as a hub for responsible AI development.

On ‘world models’ and AI hype

Xing didn’t hold back when it came to one of the buzziest trends in AI right now: so-called “world models”—systems that aim to help AI agents learn by simulating how the world works. He’s skeptical of the hype. “Right now people are building pretty video generators and calling them world models,” he said. “That’s not reasoning. That’s not simulation.” In a recent paper he spent months writing himself—unusual for someone of his seniority—he argues that true world models should go beyond flashy visuals. They should help AI reason about cause and effect, not just predict the next frame of a video. In other words: AI needs to understand the world, not just mimic it.

With that, here’s the rest of the AI news—including that tomorrow the White House is set to release a sweeping new AI strategy aimed at boosting the global export of U.S. AI technologies while cracking down on state-level regulations that are seen as overly restrictive. I will be attending the D.C. event, which includes a keynote by President Trump, and will report back.

Sharon Goldman
sharon.goldman@fortune.com
@sharongoldman

AI IN THE NEWS

White House to unveil plan to push global export of U.S. AI and crack down on restrictions. According to a draft seen by Reuters, the White House is set to release a sweeping new AI strategy Wednesday aimed at boosting the global export of U.S. AI technologies while cracking down on state-level regulations seen as overly restrictive. The plan will bar federal AI funding from states with tough AI laws, promote open-source and open-weight AI development, and direct the Commerce Department to lead overseas data center and deployment efforts. It also tasks the FCC with reviewing potential conflicts between federal goals and local rules. Framed as a push to make “America the world capital in artificial intelligence,” the plan reflects President Trump’s January directive and will be unveiled during a “Winning the AI Race” event co-hosted by the All-In podcast and featuring White House AI czar David Sacks.

OpenAI and Google DeepMind sparked math drama. Over the past few days, both OpenAI and Google DeepMind claimed their AI models had achieved gold-medal-level performance on the 2025 International Mathematical Olympiad—successfully solving 5 out of 6 notoriously difficult problems. It was a milestone that many considered years away: a general reasoning LLM reaching that level of performance under the same time limits as humans, without tools. But the way they announced it sparked controversy. OpenAI released its results first, based on its own evaluation using IMO-style questions and human graders—before any official verification. That prompted criticism from prominent mathematicians, including Terence Tao, who questioned whether the problems had been altered or simplified. In contrast, Google entered the competition officially, waited for the IMO’s independent review, and only then declared its Gemini DeepThinker model had earned a gold medal—making it the first AI system to be formally recognized by the IMO as performing at that level. The drama laid bare the high stakes—and differing standards—for credibility in the AI race.

SoftBank and OpenAI are reportedly struggling to get $500 Billion Stargate AI Project off the ground. According to the Wall Street Journal, the $500 billion Stargate project—announced with fanfare at the White House six months ago by Masayoshi Son, Sam Altman, and President Trump—has hit major turbulence. Billed as a moonshot to supercharge U.S. AI infrastructure, the initiative has yet to break ground on a single data center, and internal disagreements between SoftBank and OpenAI over key terms like site location have delayed progress. Despite promises to invest $100 billion “immediately,” Stargate is now aiming for a scaled-down launch: a single, small facility, likely in Ohio, by year’s end. It’s a setback for Son, who recently committed a record-breaking $30 billion to OpenAI but is still scrambling to secure a meaningful foothold in the AI arms race. However, Bloomberg reported today that Oracle will provide OpenAI with 2 million new AI chips that will be part of a massive data center expansion that OpenAI labeled as part of its Stargate project. SoftBank, though, isn’t financing any of the new capacity—and it’s unclear what operator will be developing data centers to support the new capacity, and when they will be built.

EYE ON AI RESEARCH

Sounding the alarm on growing opacity of advanced AI reasoning models. Fortune reporter Beatrice Nolan reported this week on a group of 40 AI researchers, including contributors from OpenAI, Google DeepMind, Meta, and Anthropic, that are sounding the alarm on the growing opacity of advanced AI reasoning models. In a new paper, the authors urge developers to prioritize research into “chain-of-thought” (CoT) processes, which provide a rare window into how AI systems make decisions. They are warning that as models become more advanced, this visibility could vanish.

The “chain-of-thought” process, which is visible in reasoning models such as OpenAI’s o1 and DeepSeek’s R1, allows users and researchers to monitor an AI model’s “thinking” or “reasoning” process, illustrating how it decides on an action or answer and providing a certain transparency into the inner workings of advanced models.

The researchers said that allowing these AI systems to “‘think’ in human language offers a unique opportunity for AI safety,” as they can be monitored for the “intent to misbehave.” However, they warn that there is “no guarantee that the current degree of visibility will persist” as models continue to advance.

The paper highlights that experts don’t fully understand why these models use CoT or how long they’ll keep doing so. The authors urged AI developers to keep a closer watch on chain-of-thought reasoning, suggesting its traceability could eventually serve as a built-in safety mechanism.

FORTUNE ON AI

Mark Cuban says the AI war ‘will get ugly’ and intellectual property ‘is KING’ in the AI world —by Sydney Lake

$61.5 billion tech giant Anthropic has made a major hiring U-turn—now, it’s letting job applicants use AI months after banning it from the interview process —by Emma Burleigh

Experienced software developers assumed AI would save them a chunk of time. But in one experiment, their tasks took 20% longer —by Sasha Rogelberg

AI CALENDAR

July 26-28: World Artificial Intelligence Conference (WAIC), Shanghai.

Sept. 8-10: Fortune Brainstorm Tech, Park City, Utah. Apply to attend here.

Oct. 6-10: World AI Week, Amsterdam

Oct. 21-22: TedAI San Francisco.

Dec. 2-7: NeurIPS, San Diego

Dec. 8-9: Fortune Brainstorm AI San Francisco. Apply to attend here.

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Business

Procurement execs often don’t understand the value of good design, experts say

Published

2 hours ago

December 8, 2025

Jace Porter

Behind every intricately designed hotel or restaurant is a symbiotic collaboration between designer and maker.

But in reality, firms want to build more with less—and even though visions are created by designers, they don’t always get to see them to fruition. Instead, intermediaries may be placed in charge of procurements and overseeing the financial costs of executing designs.

“The process is not often as linear as we [designers] would like it to be, and at times we even get slightly cut out, and something comes out on the other side that wasn’t really what we were expecting,” said Tina Norden, a partner and principal at design firm Conran and Partners, at the Fortune Brainstorm Design forum in Macau on Dec. 2.

“To have a better quality product, communication is very much needed,” added Daisuke Hironaka, the CEO of Stellar Works, a furniture company based in Shanghai.

Yet those tasked with procurement are often “money people” who may not value good design—instead forsaking it to cut costs. More education on the business value of quality design is needed, Norden argued.

When one builds something, she said, there are both capital investment and a lifecycle cost. “If you’re spending a bit more money on good quality furniture, flooring, whatever it might be, arguably, it should last a lot longer, and so it’s much better value.”

Investing in well-designed products is also better for the environment, Norden added, as they don’t have to be replaced as quickly.

Attempts to cut costs may also backfire in the long run, said Hironaka, as business owners may have to foot higher maintenance bills if products are of poor design and make.

AI in interior and furniture design

Though designers have largely been slow adopters of AI, some luminaries like Daisuke are attempting to integrate it into their team’s workflow.

AI can help accelerate the process of designing bespoke furniture, Daisuke explained, especially for large-scale projects like hotels.

A team may take a month to 45 days to create drawings for 200 pieces of custom-made furniture, the designer said, but AI can speed up this process. “We designed a lot in the past, and if AI can use these archives, study [them] and help to do the engineering, that makes it more helpful for designers.”

Yet designers can rest easy as AI won’t ever be able to replace the human touch they bring, Norden said.

“There is something about the human touch, and about understanding how we like to use our spaces, how we enjoy space, how we perceive spaces, that will always be there—but AI should be something that can assist us [in] getting to that point quicker.”

She added that creatives can instead view AI as a tool for tasks that are time-consuming but “don’t need ultimate creativity,” like researching and three-dimensionalizing designs.

“As designers, we like to procrastinate and think about things for a very long time to get them just right, [but] we can get some help in doing things faster.”

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Business

Binance has been proudly nomadic for years. A new announcement suggests it’s chosen an HQ

Published

7 hours ago

December 7, 2025

Jace Porter

For years, Binance has dodged questions about where it plans to establish a corporate headquarters. On Monday, the world’s largest crypto exchange made an announcement that indicates it has chosen a location: Abu Dhabi, the capital of the United Arab Emirates.

In its announcement, Binance reported that it has secured three global financial licenses within Abu Dhabi Global Market, a special economic zone inside the Emirati city. The licenses regulate three different prongs of the exchange’s business: its exchange, clearinghouse, and broker dealer services. The three regulated entities are named Nest Exchange Limited, Nest Clearing and Custody Limited, and Nest Trading Limited, respectively.

Richard Teng, the co-CEO of Binance, declined to say whether Abu Dhabi is now Binance’s global headquarters. “But for all intents and purposes, if you look at the regulatory sphere, I think the global regulators are more concerned of where we are regulated on a global basis,” he said, adding that Abu Dhabi Global Market is where his crypto exchange’s “global platform” will be governed.

A company spokesperson declined to add more to Teng’s comments, but did not deny Fortune’s assertion that Binance appears to have chosen Abu Dhabai as its headquarters.

Corporate governance

The Abu Dhabi announcement suggests that Binance, which has for years taken pride in branding itself as a company with no fixed location, is bowing to the practical considerations that go with being a major financial firm—and the corporate governance obligations that entails.

When Changpeng Zhao, the cofounder and former CEO of Binance, launched the company in 2017, he initially established the exchange in Hong Kong. But, weeks after he registered Binance in the city, China banned cryptocurrency trading, and Zhao moved his nascent trading platform. Binance has since been itinerant. “Wherever I sit is going to be the Binance office,” Zhao said in 2020.

The location of a company’s headquarters impacts its tax obligations and what regulations it needs to follow. In 2023, after Binance reached a landmark $4.3 billion settlement with the U.S. Department of Justice, Zhao stepped down as CEO and pleaded guilty to failing to implement an effective anti-money laundering program.

Teng took over and promised to implement the corporate structures—like a board of directors—that are the norm for companies of Binance’s size. Teng, who now shares the CEO role with the newly appointed Yi He, oversaw the appointment of Binance’s first board in April 2024. And he’s repeatedly telegraphed that his crypto exchange is focused on regulatory compliance.

Binance already has a strong footprint in the Emirates. It has a crypto license in Dubai, received a $2 billion investment from an Emirati venture fund in March, and, that same month, said it employed 1,000 employees in the country.

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Business

Leaders in Congress outperform rank-and-file lawmakers on stock trades by up to 47% a year

Published

9 hours ago

December 7, 2025

Jace Porter

Stocks held by members of Congress have been beating the S&P 500 lately, but there’s a subset of lawmakers who crush their peers: leadership.

According to a recent working paper for the National Bureau of Economic Research, congressional leaders outperform back benchers by up to 47% a year.

Shang-Jin Wei from Columbia University and Columbia Business School along with Yifan Zhou from Xi’an Jiaotong-Liverpool University looked at lawmakers who ascended to leadership posts, such as Speaker of the House as well as House and Senate floor leaders, whips, and conference/caucus chairs.

Between 1995 and 2021, there were 20 such leaders who made stock trades before and after rising to their posts. Wei and Zhou observed that lawmakers underperformed benchmarks before becoming leaders, then everything suddenly changed.

“Importantly, whilst we observe a huge improvement in leaders’ trading performance as they ascend to leadership roles, the matched ‘regular’ members’ stock trading performance does not improve much,” they wrote.

Leadership’s stock market edge stems in part from their ability to set the regulatory or legislation agenda, such as deciding if and when a particular bill will be put to a vote. Setting the agenda also gives leaders advanced knowledge of when certain actions will take place.

In fact, Wei and Zhou found that leaders demonstrate much better returns on stock trades that are made when their party controls their chamber.

In addition, being a leader also increases access to non-public information. The researchers said that while companies are reluctant to share such insider knowledge, they may prioritize revealing it to leaders over rank-and-file lawmakers.

Leaders earn higher returns on companies that contribute to their campaigns or are headquartered in their states, which Wei and Zhou said could be attributable to “privileged access to firm-specific information.”

The upper echelon also influences how other members of Congress vote, and the paper found that a leader’s party is much more likely to vote for bills that help firms whose stocks the leader held, or vote against bills that harmed them. And stocks owned by leadership tend to see increases in federal contract awards, especially sole-source contracts, over the following one to two years.

“These results suggest that congressional leaders may not only trade on privileged knowledge, but also shape policy outcomes to enrich themselves,” Wei and Zhou wrote.

Stock trades by congressional leaders are even predictive, forecasting higher occurrences of positive or negative corporate news over the following year, they added. In particular, stock sales predict the number of hearings and regulatory actions over the coming year, though purchases don’t.

Investors have long suspected that Washington has a special advantage on Wall Street. That’s given rise to more ETFs with political themes, including funds that track portfolios belonging to Democrats and Republicans in Congress.

And Paul Pelosi, former House Speaker Nancy Pelosi’s husband, even has a cult following among some investors who mimic his stock moves.

Congress has tried to crack down on members’ stock holdings. The STOCK Act of 2012 requires more timely disclosures, but some lawmakers want to ban trading completely.

A bipartisan group of House members is pushing legislation that would prohibit members of Congress, their spouses, dependent children, and trustees from trading individual stocks, commodities, or futures.

And this past week, a discharge petition was put forth that would force a vote in the House if it gets enough signatures.

“If leadership wants to put forward a bill that would actually do that and end the corruption, we’re all for it,” said Rep. Anna Paulina Luna, R-Fla., on social media on Tuesday. “But we’re tired of the partisan games. This is the most bipartisan bipartisan thing in U.S. history, and it’s time that the House of Representatives listens to the American people.”

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