Wall Street eager to strike deals with Saudi Arabia, despite political concerns

by | Oct 25, 2022 | Top Stories

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Attendees watch David Solomon, chief executive officer of Goldman Sachs & Co., on a screen as he speaks during a panel session at the Future Investment Initiative (FII) conference in Riyadh, Saudi Arabia, on Tuesday, Oct. 25, 2022.

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Tasneem Alsultan/Bloomberg via Getty Images

The relationship between the United States and Saudi Arabia is at its lowest point in decades. But that hasn’t stopped Wall Street executives and some of the world’s wealthiest investors from gathering in Riyadh for a conference that’s nicknamed “Davos in the Desert.” On Tuesday, Jamie Dimon and David Solomon, the CEOs of J.P. Morgan Chase and Goldman Sachs, respectively, shared a stage with billionaires Stephen Schwarzman, of The Blackstone Group, and Ray Dalio, who founded the world’s largest hedge fund. Former President Trump’s son-in-law, Jared Kushner, also appeared at the Future Investment Initiative (FII) conference, and former Treasury Secretary Steven Mnuchin is scheduled to speak on Wednesday. Both Kushner and Mnuchin now run private equity funds backed by Saudi Arabia. But no cabinet officials or senior staff from the Biden administration are there, because the White House is currently reevaluating its partnership with Saudi Arabia.

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Former President Trump’s son-in-law, Jared Kushner, at the Future Investment Initiative conference in Riyadh, Saudi Arabia.

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“This is definitely one of the lower points in U.S.-Saudi relations,” says Karen Young, a senior research scholar at Columbia University’s Center on Global Energy Policy.

Biden’s disappointment over Saudi oil production cuts President Biden, who has raised concern over the country’s human rights record, is upset Crown Prince Mohammed bin Salman pushed for deep cuts to oil production earlier this month, which has led to higher energy prices. At the same time, Saudi Arabia has a $600 billion government investment fund, and the country is telegraphing its ambitions beyond traditional energy. There are panels at the conference on artificial intelligence, cryptocurrency, tourism and hospitality, and investing. Other speakers include Sam Bankman-Fried, the CEO of the cryptocurrency exchange FTX, and Ben Horowitz, one of the world’s best-known venture capitalists.

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The Future Investment Initiative conference attracts U.S. business leaders, former government officials, and investors.

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A more assertive and confident Saudi Arabia has emerged Young says Saudi Arabia is trying to signal to the wider world that it “has changed.” “It’s an assertiveness in foreign policy,” she observes. “It’s a confidence in the Kingdom’s ability to attract investment, and to be a player in a much larger field.” This week, there are opportunities to broker deals on the sidelines of the conference, but Young says the conference is above all else a public relations tool. “This is much more about image,” she says. “It’s about a kind of ideology of the future of the Kingdom, and frankly, more of a public relations effort than a place where I think we’re going to see real commitments of foreign direct investment in building companies in the Kingdom.”
Despite its recent reservations about Saudi Arabia, the Biden administration says it did not advise U.S. companies to stay away from the con …

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