Facebook owner Meta is testing its first in-house chip for training artificial intelligence systems, a key milestone as it moves to design more of its own custom silicon and reduce reliance on external suppliers like Nvidia, two sources told Reuters.

The world’s biggest social media company has begun a small deployment of the chip and plans to ramp up production for wide-scale use if the test goes well, the sources said.

The push to develop in-house chips is part of a long-term plan at Meta to bring down its mammoth infrastructure costs as the company places expensive bets on AI tools to drive growth.

Meta, which also owns Instagram and WhatsApp, has forecast total 2025 expenses of $114bn to $119bn, including up to $65 bn in capital expenditure largely driven by spending on AI infrastructure.

Read-Meta to invest up to $65bn in AI Infrastructure, CEO Mark Zuckerberg reveals

One of the sources said Meta’s new training chip is a dedicated accelerator, meaning it is designed to handle only AI-specific tasks. This can make it more power-efficient than the integrated graphics processing units (GPUs) generally used for AI workloads.

Meta is working with Taiwan-based chip manufacturer TSMC to produce the chip, this person said.

The test deployment began after Meta finished its first “tape-out” of the chip, a significant marker of success in silicon development work that involves sending an initial design through a chip factory, the other source said.

A typical tape-out costs tens of millions of dollars and takes roughly three to six months to complete, with no guarantee the test will succeed. A failure would require Meta to diagnose the problem and repeat the tape-out step.

Meta and TSMC declined to comment.

The chip is the latest in the company’s Meta Training and Inference Accelerator (MTIA) series. The program has had a wobbly startfor years and at one point scrapped a chip at a similar phase of development.

However, Meta last year started using an MTIA chip to perform inference, or the process involved in running an AI system as users interact with it, for the recommendation systems that determine which content shows up on Facebook and Instagram news feeds.

Meta executives have said they want to start using their own chips by 2026 for training, or the compute-intensive process of feeding the AI system reams of data to “teach” it how to perform.

As with the inference chip, the goal for the training chip is to start with recommendation systems and later use it for generative AI products like chatbot Meta AI, the executives said.

“We’re working on how would we do training for recommender systems and then eventually how do we think about training and inference for gen AI,” Meta’s Chief Product Officer Chris Cox said at the Morgan Stanley technology, media and telecom conference last week.

Cox described Meta’s chip development efforts as “kind of a walk, crawl, run situation” so far, but said executives considered the first-generation inference chip for recommendations to be a “big success.”

Meta previously pulled the plug on an in-house custom inference chip after it flopped in a small-scale test deployment similar to the one it is doing now for the training chip, instead reversing course and placing orders for billions of dollars worth of Nvidia GPUs in 2022.

The social media company has remained one of Nvidia’s biggest customers since then, amassing an arsenal of GPUs to train its models, including for recommendations and ads systems and its Llama foundation model series. The units also perform inference for the more than 3 billion people who use its apps each day.

The value of those GPUs has been thrown into question this year as AI researchers increasingly express doubtsabout how much more progress can be made by continuing to “scale up” large language models by adding ever more data and computing power.

Those doubts were reinforced with the late-January launch of new low-cost models from Chinese startup DeepSeek, which optimise computational efficiency by relying more heavily on inference than most incumbent models.

In a DeepSeek-induced global rout in AI stocks, Nvidia shares lost as much as a fifth of their value at one point. They subsequently regained most of that ground, with investors wagering the company’s chips will remain the industry standard for training and inference, although they have dropped again on broader trade concerns.

The Dubai World Trade Centre has announced the launch of an international sports and entertainment free zone. This will be the UAE’s first dedicated sports and entertainment business cluster within the perimeter of the free zone.

According to a WAM report, the zone will serve as an industry-focused business hub, where interested individuals can obtain licenses for various sports and entertainment business activities. It aims to foster a unique, collaborative ecosystem to support and accelerate the industry’s growth.

Read-Insights: The AI-powered future of sport and fan engagement

The zone will function as a unified platform for procuring business licenses in sectors such as sports management and marketing, event management, talent representation, and media and broadcasting. In addition, the zone will also support the growth of areas like e-sports, AI-driven sports tech, and fan tokens.

Lastly, the zone will serve as a platform for a range of industry players, including global brands, sports leagues and franchises, rights owners and investors, sports and talent agencies, artists, sports and media personalities, social media influencers, and creative industry professionals.

Around 600 foreign companies have set up their regional headquarters in Saudi Arabia.

Some of the most prominent firms that have already relocated their headquarters to Saudi Arabia are Northern Trust, Bechtel and Pepsico from the US, and IHG Hotels and Resorts, PwC, and Deloitte from the UK, an Arab News report conveyed.

US-based investment bank Morgan Stanley had been granted the approval to establish its regional headquarters in Saudi Arabia, in November 2024.

This has happened since the 2021 launch of the Saudi Program for Attracting Regional Headquarters (RHQ) of multinational corporations to the Kingdom of Saudi Arabia’s capital.

This particular attempt has been spearheaded by the Ministry of Investment and the Royal Commission for Riyadh City, according to a Saudi Press Agency report.

Regional headquarters program

The regional headquarters program in Saudi Arabia offers a range of incentives to international companies. It is as part of this program that entitles the corporates to receive a 30-year tax relief package, announced in December 2023. The package allows these companies zero% corporate income tax and also withholds tax for the qualifying regional headquarters.

Additionally, the program streamlines the process of setting up operations in any region in Saudi, providing comprehensive support services to assist companies in their transition.

What is attracting these firms to Saudi Arabia?

Apart from the regional headquarters program, it is also the modern infrastructure and the other facilities that are attracting the international firms to the country. The program also facilitates access to international K-12 schools, with seven new schools having been established in the country.

How do foreign firms contribute to Saudi’s economic growth?

The establishment of the regional headquarters of around 600 foreign companies in Saudi is expected to substantially contribute to the growth of the country’s economy.

The initiative had been adopted to double the size of Saudi’s economy, improve the quality of life in the country and most importantly foster Riyadh’s position among the top 10 largest city economies in the world by 2030.

What drives the success of the regional headquarters program?

Apart from Saudi Arabia’s strategic location, at the intersection of Asia, Africa, and Europe, positioning it as a global logistics hub, the country’s young and skilled workforce with its commitment to a business-friendly environment and long-term economic stability, constitute as magnetic parameters in attracting international companies to be headquartered in Riyadh.

The Public Investment Fund (PIF) in Saudi Arabia has announced the establishment of Al Waha Duty-Free Company (Al Waha), a travel retailer and the first Saudi-owned duty-free operator.

According to a Saudi Press Agency report, Al Waha, which is entirely owned by PIF, is on track to become a leader in travel retail. It will also play a key role in securing a larger share of duty-free spending for Saudi Arabia’s economy.

Al Waha: How will the entity function

Al Waha will develop luxury retail outlets at select locations across Saudi Arabia, offering a variety of merchandise, including distinctive, high-quality Saudi products. The company will operate airport outlets on a duty-free basis and explore additional travel retail opportunities at land border crossings and seaports, as well as through channels such as inflight shopping.

Read: Dubai Duty Free introduces new way to shop

“By establishing Al Waha as a national travel retail champion, PIF aims to grow Saudi Arabia’s travel retail industry and further support its ambitions for the tourism sector. Al Waha will provide a distinctive travel experience across Saudi travel retail touchpoints, offering diverse products, duty-free operations, and a superior digital customer journey,” said Majed Al Assaf, Head of Consumer Goods and Retail in MENA Investments at PIF.

Saudi Arabia set to gain a larger share of travel retail spending

There is significant potential for Saudi Arabia to capture a larger share of travel retail spending in the future. This will be driven by the continued increase in visitors to the country, which presents new opportunities to generate sustainable travel retail revenues for the Saudi economy.

The Public Investment Fund is also unlocking the capabilities of strategic sectors to diversify Saudi Arabia’s economy.

The global private equity (PE) landscape is witnessing a resurgence, with dealmaking activity gaining traction in 2024.

However, lingering economic uncertainties and sluggish fund-raising continue to pose significant challenges to a full-scale recovery.

Bain & Company’s 16th annual Global PE Report, released in March, highlights a cautiously optimistic outlook for the industry, as both investments and exits show clear signs of revival after a prolonged downturn.

Investment and exit recovery signals renewed confidence

Following two years of sharp declines, PE investments and exits rebounded in 2024, marking a crucial turning point for the industry.

Pent-up demand among general partners (GPs) to deploy capital, alongside improving economic conditions and central bank interest rate cuts, fuelled a 37 per cent year-on-year rise in buyout investment value to $602bn (excluding add-on deals).

Exit activity also showed strong momentum, with global exit value climbing 34 per cent to $468bn. The exit count increased by 22 per cent to 1,470, suggesting a gradual thaw in the liquidity freeze that had constrained capital distributions to limited partners (LPs).

Despite this positive momentum, a backlog of 29,000 unsold companies remains, underscoring the need for further market improvements.

Navigating a complex macroeconomic ecosystem

Bain’s analysis underscores the importance of adapting to a dynamic macroeconomic environment in 2025. Factors such as inflation trends, interest rate fluctuations, trade policies, and geopolitical uncertainties remain critical variables influencing deal activity.

“2024 can be considered the year of the partial exhale. Whether the renewed impetus in 2024 can build will depend on how policy unfolds,” said Hugh MacArthur, chairman of Bain & Company’s global Private Equity practice.

“We think the headwinds that have held back activity since mid-2022 should continue to dissipate. The industry is anxious to make deals, GPs are finding creative ways to boost liquidity, more dollars should flow in from sovereign wealth funds and private wealth, and returns remain strong. But deal appetite is still tempered by the uncertainties keeping markets on edge,” he added

The Middle East’s expanding private equity landscape

Gregory Garnier, Middle East head of Bain’s Private Equity practice, pointed to the region’s growing appeal for investors. “The Middle East is entering a dynamic period of growth and transformation, creating unprecedented opportunities for investors. As economies diversify and sectors such as technology, renewable energy, and infrastructure gain momentum, private equity firms have a unique chance to drive meaningful value.”

He emphasised that forward-thinking funds leveraging regional expertise and strategic partnerships will be best positioned for success.

Global trends in dealmaking and exits

Bain’s report outlines strong growth in deal value across regions, with take-private transactions dominating high-value deals.

Europe led the recovery with a 54 per cent rise in deal value on a 9 per cent increase in deal count, while North America saw a 34 per cent increase in value.

The Asia-Pacific region recorded an 11 per cent rise in deal value, although weaker growth in China and a decline in Japan weighed on overall performance.

Public-to-private deals surged to $250bn globally, representing almost half of all deals over $5bn in North America. The technology sector remained a focal point, accounting for 33 per cent of buyout deals by value.

The financial services and industrial sectors also experienced significant growth, with deal values jumping 92 per cent and 81 per cent, respectively.

Exits rebounded strongly, driven by a 141 per cent increase in sponsor-to-sponsor transactions, which totalled $181bn in 2024. However, strategic exits remained flat, and IPO activity continued to lag, representing just 6 per cent of exits by value.

Despite the uptick in exits, distributions to LPs dropped to 11 per cent of net asset value — the lowest in a decade — indicating that liquidity challenges persist.

Fundraising faces continued pressures

Fundraising remained sluggish in 2024, marking the third consecutive year of decline. Total capital raised fell 24 per cent year-on-year and is down 40 per cent from the 2021 peak of $1.8tn. The number of funds closed dropped by 28 per cent to 3,000 — about half the pre-pandemic annual rate.

Buyout funds, while still the dominant asset class, raised 23 per cent less capital than in 2023, with total buyout fund-raising 11 per cent below the five-year average.

Limited partners (LPs) are becoming increasingly selective, directing capital towards the largest and most experienced funds. This trend has enabled top-quartile managers to raise significantly larger follow-on funds, while many lower-quartile firms struggle to meet targets.

Private equity competition

Bain’s report highlights structural shifts that will reshape the PE industry. Rising costs, intensified competition for deals, and mounting pressure on management fees are creating a more challenging operating environment.

As scale becomes increasingly important, large firms are leveraging their advantages to secure capital and expand market share. Bain anticipates that mergers and acquisitions within the alternative asset management industry will play a greater role, with 180 transactions recorded since 2021.

Looking ahead, private equity firms must redefine their strategies to maintain a competitive edge.

Bain emphasises that success will depend on differentiation, operational excellence, and the ability to navigate a rapidly evolving investment landscape.