Gulf Funds Recalibrating American Investments, Including Backing for Paramount Merger, as Iran War Rages On
Financing underpinning the artificial intelligence bubble is also on the table for reconsideration, sources told Drop Site.
|
| ||||||||||||
We made a commitment from day one: no paywalls. Ever. Someone living paycheck to paycheck can access the same reporting as anyone else. Our journalism isn’t just for people who can afford to pay—it’s for everyone who needs it.
That commitment is what allows us to amplify the voices of journalists risking their lives on the ground in Gaza, Venezuela, Sudan, Pakistan, Syria, and elsewhere. It’s what gives us the editorial independence to publish stories that have real-world impact, stories that powerful interests don’t want told. It’s what lets us compete against billionaire-controlled propaganda machines.
But here’s the reality: we can only do this with your support.
 |
Gulf sovereign wealth funds are undertaking a sweeping review of American investments, driven by a combination of commercial necessity and political recalibration driven by the Iran war, according to sources familiar with deliberations around the high-level financing deals.
In particular, the planned merger between Paramount Skydance and Warner Brothers Discovery, made possible as a result of Gulf financing, is getting a new look. A postponed meeting of the board of the Qatar Investment Authority will reconvene within the next week as the fund recalibrates its investment approach, a source with knowledge of the deliberations said. “Even from a purely, purely numbers perspective, you have to look at this again,” said the industry source, asking for anonymity to speak freely about investment matters rarely discussed publicly.
No announcement from the meeting is expected, the source said, as the Qataris are unwilling to unilaterally back out of the deal without Saudi Arabia also doing so. Withdrawing from the deal would be seen as a political shot against both Israel and the United States, which Qatar feels it can not undertake alone under the current circumstances.
The merger between the two media conglomerates was announced on February 27, 2026. The next day, the U.S. and Israel launched a surprise attack on Iran, which responded, as promised, by attacking Gulf countries hosting U.S. bases. Those same Gulf countries are the primary financial backers of the merger, according to documents on file with the Securities and Exchange Commission. Wealth funds connected to Saudi Arabia, Qatar, and the United Arab Emirates pledged $24 billion to back the deal, which cost nearly $111 billion.
Under the current scenario, the Paramount deal remains likely to go through, but that could change if the war goes on for another month or longer and Gulf oil and gas assets come under even greater attack. Trump has turned his attention to Iran’s oil infrastructure, and Iran has pledged to retaliate by targeting Gulf oil and gas assets in response. Yet even the current circumstances are forcing a deeper look at the entire suite of deals in the sovereign wealth funds’ portfolios. A Paramount spokesperson declined to comment. Spokespersons for the Public Investment Fund (Kingdom of Saudi Arabia), L’imad Holding Company PJSC (UAE), and Qatar Investment Authority (Qatar) did not respond to requests for comment.
At risk is the heart of the U.S. economy, which is currently fueled by the growth of AI companies and the data centers that power them. Harvard economist Jason Furman calculated that more than 90% of GDP growth in the first half of 2025 was driven by AI and related investments. Much of the data center buildout is powered by Gulf financing, while U.S. companies are also building out heavily in the Gulf.
All of that is now uncertain. “The story is not just deals specifically, but if you look at all the AI data centers and all that growth that’s coming in the next few years, where’s most of that capital coming from?” he said. “A lot of it is coming from the Gulf. And if the Gulf—not politically, but even just from a financial perspective—cannot commit that, what’s the knock on effects on those companies and the U.S. economy? I don’t think anyone has done that math, but there is something there absolutely.”
“Hyperscalers”—referring to major companies like OpenAI—“are fine, those guys are huge, they can afford it, but what about the next level?” he said, referring to a sweeping class of companies that could go under without Gulf support.
A second source with close relationships to key Gulf leaders said that Gulf countries are looking closely at all of the deals that have struck, given the new financial realities at play.
In early March, the Financial Times reported that Saudi Arabia, Qatar, the UAE, and Kuwait were collectively reviewing investments with an eye toward canceling some, citing a Gulf official. “A number of Gulf countries have begun an internal review to determine whether force majeure clauses can be invoked in current contracts, while also reviewing current and future investment commitments in order to alleviate some of the anticipated economic strain from the current war,” the official told the FT. “Especially if the war and related expenses continue at the same pace.”
The war and related expenses have not merely continued but accelerated. The industry source said that divestment would likely happen quietly, but it was an inevitability. “Just mathematically, it will have to happen,” he said. “I don’t think it will be obvious, I don’t think it will be messaged that way. But I think it will just happen. And then as things build up again, then people are gonna wonder, if it’s the same people that are involved now or later, you’re gonna question, are they gonna do the same thing again? Are they gonna think about diversifying? That’s the question.”
Gulf investors, he said, “just won’t be able to do the scale they were committed to.”
Paramount is run by David Ellison, the son of Oracle founder Larry Ellison, one of the world’s wealthiest men and the largest donor to the nonprofit Friends of the IDF. Larry Ellison put up billions to cover his son’s merger with Warner Brothers. The Ellisons bought Bari Weiss’s The Free Press and handed her the reins to CBS News, driven by David Ellison’s admiration for her support for Israel. Weiss has cheerled the war, disturbing journalists in her newsroom, even as it threatens her patron’s media empire. The acquisition of Warner Brothers will also give Ellison control of CNN.
Ultimately, even if QIA’s preference in the end is to exit the deal, the fund will stay in unless Saudi also departs.“It’s not a Qatar decision. It’s not a Saudi-UAE decision. It’s a Saudi decision, because all three countries have to commit for the deal to make sense, unless you can find other investors from Asia,” the industry source said. Chinese wealth fund Tencent had previously been involved, but dropped out so that the transaction would not have to undergo U.S. federal scrutiny on national security grounds.
The most likely outcome of the upcoming meeting, the industry insider said, will be for the fund to continue a wait-and-see approach, knowing the political and economic situations are rapidly evolving. “If Saudi goes in, Qatar will follow. If Saudi doesn’t go in, Qatar won’t follow, they’ll just delay, delay, delay, and see what happens. Everyone can still say, ‘No, no, we’re committed, we’re committed.’ And there’s a million ways, if this continues another month, you could force majeure, you could do whatever.”
A Qatari source with insight into the process also said that the deal was still heavily likely to go through.
Trump’s decision to humiliate MBS publicly has thrown a wrench into the relationship with Saudi Arabia. At a Saudi-backed investment conference, Trump riffed on his relationship with the crown prince. “A short time ago we were together and he looked at me and he said, ‘You know, one year ago you were a dead country. Now, you’re the hottest country anywhere in the world,” Trump said. “He didn’t think this was going to happen. He didn’t think he’d be kissing my ass, he really didn’t. He thought it’d be just another American president that was a loser with a country that was going downhill, but now he has to be nice to me. You tell him he better be nice to me, he’s gotta be.”
At the same conference, Saudi’s wealth fund announced a 15% cut in capital investment.
Trump ally Steve Bannon piled on. “Maybe we can get a couple or three of those princes in uniform,” he said on his podcast, The War Room. “Got any kids in special forces? Let’s line up those royal families and see how big they’re talking.”
The insult has contributed to the air of uncertainty surrounding the Paramount financing, the industry source said. “Look, that thing that happened a couple days ago is not a small thing. I mean, we know MBS. That was a pretty insulting move. I don’t know if the word’s ‘petty,’ but he’d be willing to move drastically based on emotions,” he said.
He said that most in the industry were still stuck in a fog-of-war scenario and hadn’t gamed out longterm scenarios. Trump, he said, didn’t seem to have thought things through either, particularly as it related to the president’s promise to supply Europe energy. “The knock on effects are tremendous, because who will supply the LNG and the gas to Europe the next few years? It’s the U.S. But who also needs that gas to grow the data centers? It’s the U.S. So something has to give.” Access to helium, an essential component for the AI industry, is also at risk as a result of the war.
The major players—China, Russia, and even Saudi Arabia—are all incentivized to keep it going, he said.
Saudi Arabia is “not as affected by this war as people may think, their spot prices went up, they, logistically, they’re the hub for everything now,” he said. “It’s making up the difference.”
“If you think about who’s really incentivized to deescalate right now, not many. Iran’s happy for this to continue. Israel’s happy for it to continue. U.S. doesn’t seem to care. It doesn’t affect them. And you have China, China maybe doesn’t want it but Russia is benefitting like more than anybody. So it’s really Qatar that needs to just deescalate for their own security. Kuwait’s fucked. Bahrain’s fucked, but they’re not really players.”
