Episode
Is the Gulf Still the Capital of Capital? + How War Could Hurt America’s Tech Funding
- Podcast
- The Spillover
- Published
- Apr 22, 2026
- Duration seconds
- 2585
- Processing state
not_requested
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Summary
This episode explores how the Gulf region transformed into a global “capital of capital,” and the risk of the Iran conflict disrupting that role. It examines the ripple effects on global markets, U.S. tech and AI investment, and the broader balance of economic power if Gulf capital starts turning inward to focus on defense. Hosts: Rebecca Patterson, Senior Fellow, CFR Sebastian Mallaby, Paul A. Volcker Senior Fellow for International Economics, CFR We discuss: How the Gulf transformed itself from a group of oil-dependent economies into a global “capital of capital,” attracting trillions in investment, talent, and tech partnerships. The scale of Gulf sovereign wealth funds and why it became a critical funding source for global markets, especially U.S. tech and AI. How a prolonged conflict could force Gulf states to redirect capital inward toward defense and reconstruction. As Sebastian Mallaby puts it: “If the capital of capital turns inward in any significant way, the global effects could be profound.” How the Iran war challenges the core assumption that the Gulf could remain insulated from geopolitics. The Gulf's history of boom-bust cycles and a key difference in the current bust: it's not about price, but the ability to move energy through key chokepoints like the Strait of Hormuz. How disruptions hit different Gulf economies in different ways, from physical damage in energy exporters to confidence shocks in hubs like Dubai. The potential global spillover of less Gulf capital flowing into U.S. markets, private equity, and AI infrastructure and what that means for everyday outcomes—higher bond yields, slower asset growth, and ripple effects on things like mortgage rates. The big open question: if the Gulf steps back as a global capital provider, who, if anyone, can r…