US Plans to Grant Saudi Arabia More Access to AI Chips
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Live from New York and San Francisco, this is Bloomberg Technology coming up all eyes on Saudi Arabia today as tech CEOs meet with President Trump and Saudi Arabia's crown prince. Plus the Trump administration preparing to announce a deal that would grant Saudi Arabia more access to advanced semiconductors. And Apple planning to improve iPhone battery life with AI.

Details later this hour, but first we check in on these markets. I bring you Year to Date. We re-enter a bull market on the Nasdaq 100 and now we push higher on the Nasdaq 100 to 0.7% for Year to Date. Just to show you the whirlwind of movements we've had throughout the tariff concerns, we now break back even when it comes to the Magnificent Seven leading the charge higher. Ed, a lot of that to do with geopolitics today, but over in the Middle East rather than what's happening with the US and China.

Yeah, the single most important tech name we've focused on, Nvidia. The stock has really surged in the last 30 minutes or so. A deal with Saudi Arabia's Humane, 18,000 Blackwell GPUs in the first phase going into a 500 megawatt data center.

Small in hyperscale terms, but significant because of access to cutting edge technology for that nation. AMD also has its own ad hoc agreement going on with the state. This is important and it's the money that's driving tech right now coming out of Saudi Arabia. But you're absolutely right, there's the politics behind it as well. There is. And let's get the context.

Bloomberg's Germana Besseci is joining us now live from Saudi Arabia. We've just heard from Elon Musk on stage, of course, anticipating the U.S. president to be there with the crown prince. Just give us the context of what is happening right now.

Yeah, well, obviously Elon Musk must have known that Bloomberg technology was coming up. The timing was perfect. But yes, there have been so many discussions taking place around partnerships on everything from defense, one of the largest deals ever announced in history, Saudi Arabia pledging to buy up to $142 billion worth of arms and weaponry from.

from the U.S., a dozen defense companies involved in that. The headline figure, $600 billion worth of Saudi investment committed to be invested in the U.S. over the coming years. Not a lot of detail yet, and that is a number that we've heard before.

One of the technology sites, some massive announcements coming through just in the last hour and of note is the one that Ed was just talking about with Humane. So this is the AI investment vehicle that the crown prince announced was being launched yesterday in anticipation of today. So this is a new venture. It was only announced ahead of President Trump's visit. Today they are saying that with this venture, they will be building AI factories across the kingdom of Saudi Arabia and using a

up to 18,000 Nvidia GB300 Grace Blackwell chips. So those are those chips, of course, that Saudi Arabia had been angling to get access to. And by the way, earlier in the day, I should have mentioned that Jason Huang was walking around here. So we sort of got a glimpse of a big announcement that was to come. But this ties back to another announcement that came in the run-up to this trip, which was that the Trump administration are rescinding those Biden chips

instituted diffusion rules that were set to come in place. And earlier on, we heard from David Sachs, who was the crypto AI czar, and he was saying that those diffusion rules were too bureaucratic, and there are smarter ways to ensure that these chips don't get into the wrong hands, which is why they're rescinding that, and of course, coming up with these bilateral agreements, this big one today with Nvidia and Humane.

There are still some confirmations to come, right? So Bloomberg reported citing sources that the Trump administration would do a deal with Saudi Arabia to give the nation access to leading-edge or cutting-edge chips. Then NVIDIA told us that they were already doing it, 18,000 GPUs. We will hear from President Trump and Crown Prince Mohammed bin Salman later in Riyadh. Set the scene for us of what's to come and what kind of further details we're looking out for, Jumana.

Yeah, absolutely. So they should be making their way here any second now. Everything is running slightly delayed, but they should be here in the next 10 to 15 minutes walking on the stage behind me. And actually, if you just take a look, I don't know if you can see, but there,

a bunch of individuals. If you zoom in, you'll see that it is many American CEOs alongside Saudi officials, industry leaders from Saudi Arabia standing together for this group photo because so many of these deals have been signed. And just to give you a

to run through some of the other deals that also came up today. Aramco, for example, the state oil company, saying that they're looking to spend $3.4 billion to expand their refineries in the U.S. There's a health solutions firm that has also said that they are coming together with U.S. to partner on $5.8 billion building a plant in the United States as well. Another big announcement on the airlines front,

An airline leasing company called Avilease in Saudi Arabia have also committed to buying $4.8 billion worth of Boeing 737-8 jets. So that's also been a big focus for President Trump in the region. We know that in Doha as well.

In coming days, there could be a big order coming on the Boeing front. And then, of course, we spoke about this big defense deal, $142 billion worth of defense agreements secured between the U.S. and Saudi Arabia from a geopolitical perspective as well. That is key for Saudi Arabia. They have been pushing to get this defense agreement across the line. It seems like they are finally there.

And then we haven't even talked about some of the smaller, perhaps, but also important geopolitical breakthroughs in the run-up to these next few days. So far, lots of announcements, and we're going to hear more from the president and the crown prince shortly.

Bloomberg's Jumaana Bhattacharya, thank you very much. Now, let's stick with that top story. The Trump administration was preparing to announce a deal that would grant Saudi Arabia more access to advanced chips, allowing the country to increase its data center capacity. That was all according to sources. Bloomberg's Mike Shepard joins us now. It is difficult to unpack because literally the deal between NVIDIA and Humane, as an example, is for Blackwell.

their current generation of accelerator, Mike. And my understanding that that will go into server designs in a 500 megawatt data center, which isn't huge, frankly, in the scheme of hyperscale data centers. What do we know about where this kind of bilat stands between the two nations?

Well, we're still waiting to see, Ed, the formal announcement of this agreement, but we are expecting it during the president's visit to the kingdom. And the idea would be to grant Saudi Arabia much more access with fewer fetters and obstacles in the way to gaining access to those kinds of chips that you just talked about from NVIDIA and from AMD that are needed to power the kingdom's

AI ambitions. That 500 megawatt data center that you just alluded to is just the start, really. And as Jamana outlined in her opener there, the Trump administration is moving away from Biden era rules that set these three broad categories of access, governing countries' ability

to buy these sophisticated AI chips. The Trump administration instead is trying to set up these bilateral accords with individual countries based on needs and based on the relationship. Now, the concern of course is how do you keep China from exploiting those relationships

and somehow gaining access. And that is going to be one of the tricks in all of these individual deals. The U.S. will be insisting on some security provisions with Saudi Arabia, and there are also similar discussions about to take place with the United Arab Emirates on a deal that may also grant them access too. That also has been in the work. These Gulf nations, like so many others, are seeking access to these chips, and they're imploring the Trump administration to take some steps to make it easier. This is a broad trip.

to the Middle East. We'll get on to the UAE in a moment, but some breaking news that President Trump is indeed set to meet the Syrian president in Saudi Arabia. This is calling to a U.S. official, and Trump himself had said the U.S. may relieve sanctions on Syria to give the country, quote, a fresh start, that being reported in previous days, Mike. So this is a broad

geopolitical conversation we have, but go back to really what we focus on in tech, the fact that these deals, this access might be granted, and not just for Saudi Arabia, potentially for the UAE, and all of this while we are still trying to see a restriction on China's access, either via cloud or indeed by redistribution by those countries.

NICK SCHIFRIN: Well, that's right, Carol. And other nations could look to what happens during this trip. This is Donald Trump's first trip abroad since winning reelection and taking office. And other nations will be looking to how the UAE and the Saudi -- Saudi government

arrange a new understanding with the Trump administration when it comes to access to advanced technology. This could be a template for how other countries, whether it be in Asia or in Europe, somehow reach an understanding with Trump on gaining access to NVIDIA technology. Every country out there wants more of it. They want to expand their AI capabilities. And right now, NVIDIA and AMD are the biggest names and really the only game in town.

I want to go back to the politics of this, Mike. It shows us in our reporting that the Trump administration is more willing than the Biden administration were to allow the movement of U.S. technology to the Gulf region.

That's absolutely right, Ed. And we've heard the signal from the president on down. His A.I. advisor, David Sachs, has really reflected that quite publicly on X and in others public statements recently where he has said, look, this A.I. diffusion rule from the Biden team, maybe it was well spirited in trying to keep

China from gaining access to U.S. technology, but it was inflexible. It was hard to work with, and it impeded our ability to export American technology abroad. And he really wanted to make sure that America first didn't just stay within these borders, in his view. And the way that they see this is by sharing this technology with U.S. allies that are seen as trusted.

We do have live pictures right now, Mike, of the President of the United States, President Donald Trump, arriving at the event with the Crown Prince, of course, Prince Mohammed bin Salman, MBS, as he is known, more largely. This is, of course, as they're going to take the stage themselves. All of this is at the Saudi-U.S. Investment Forum, currently upon us in Riyadh, where we are seeing deals be unfolded, where we're seeing plenty of U.S. executives take to the stage.

and we are about to hear from the President and the Crown Prince themselves. But Mike, as we see these live pictures of the arrival of the dignitaries at this moment, what else are we preparing ourselves for in terms of the breadth, whether it be in technology, whether it be in defense? This seems to be the key area that President Trump wants to see billions be exchanged for.

Well, that's right. This trip is about deals, deals, deals. While geopolitics play a role in this conversation that the president is going to be having in the three-nation trip he is taking, Saudi Arabia, then the UAE, and then Qatar, it really is about bringing investment to the U.S. This has been his mission since taking office. We saw on his first full day in office that big soft

a Stargate deal announced with SoftBank and others. And he really wants to be able to tout and point to this as his economic accomplishment, through tariffs that would pressure companies in other countries to send more business to the U.S., to get manufacturing here, but also to ensure that there is an American stamp on all of this technology that we are seeing, Kara.

Michael Shepard, standing by for us. We appreciate it. We'll come back to you in a moment.

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But as we see...

the President of the United States, gather with the Crown Prince over in Riyadh. We're going to take you to the market reaction right now because Fiona Sincottra is standing by, senior analyst at Citi Index Financial Markets. Look, today we do have a risk on attitude. We are seeing the NASDAQ up more than 1%, let's call it 1.5% at the moment. Deals unfolded, but also the China-US calming in terms of the ratcheting up of tariffs. What do you think about buying into these names right now?

Yes, we're definitely getting a sense that the mood music has changed quite considerably as we started this week and as we continue into Tuesday. So obviously we had that strong rally in the NASDAQ 100 yesterday up around 4.3%. Seeing those gains extended today up around 4.3%.

around 1.4%. So the mood is definitely upbeat as far as these stocks are concerned. And it does feel that the sentiment is changing and that the outlook is more positive. We're past that worst-case scenario. We seem to be looking at a more positive, upbeat outlook.

I would like to say that I don't think we're quite out of the woods yet. I think there are still potential for some tariff issues which haven't been resolved, particularly around sort of electronics and semiconductors that we had heard the White House say that they were sort of...

putting back. So we still need to get a little bit more clarification about that. But as far as the de-escalation of the trade war with China is concerned, as far as this push for deals in Saudi Arabia is concerned and UAE, that's really important.

Fiona, the president standing next to MBS, but also Saudi Arabia's investment minister Khalid Al-Fali and also the head of the public investment fund. If these tech deals are substantive between the United States and Saudi Arabia, how do you do that as an investor? Do you invest in a U.S. proxy that's set to benefit or is Saudi accessible to your clients?

No, so it would be through the US proxy. That's where we'd be focusing attention. I think that's where the most popular sort of trades would be looking as well. That's what's most easily accessible and potentially the... I would like to see less risk adverse, but I mean, we...

That's what we just need to focus on at the moment is where is the access to this? And yeah, through the US proxies. I mean, obviously, chip stocks are the area that we've been looking at very focused recently. Those are the areas that are continuing to push higher today. NVIDIA is up more than 5%. How big a deal is this for them to get access to the Saudi market?

I think this is a big deal, not just because the numbers that have been announced today, potentially they're not really as huge, but it's just what this means for the future. We know that Saudi Arabia is very focused on looking towards AI, looking towards technological future. And so this could be the start of something that really is much,

bigger than what it appears to be today. Today is definitely a move in the right direction. It's upbeat news. It's encouraging. And we can see that from the reaction in the share price. But I think actually what this means for the future and going forward is almost just as important. And what's been so hampering the willingness to buy back into generative AI trade or to these AI infrastructure plays in particular was the lack of clarity, a lack of clarity as to what the AI diffusion rule would be

implemented. We know that that's now not going to be the fact that now it becomes a tit for tat, that it becomes embroiled within the overall tariff conversations on a country by country basis. Fiona, is that a positive? Does that even mean that maybe we'll have Jensen Huang having access still to China in some way?

Potentially. I mean, I think what you say is true. There has been more clarity than what there was, but I don't think everything is as clear as it could be for investors still. I do think there is still a level of uncertainty, but that has been broadly wiped away. I mean, if we think about what that means, what investors are looking for is some sort of form of clarity. And because we are moving slowly and steadily towards uncertainty,

a clearer understanding of what Trump is looking for, what Trump's aiming for, then that obviously does help the investors take their decisions. Does it then become all about the 2024 trade, Nvidia, AMD, once again, the infrastructure play? Do we broaden it out? Because at the moment, Apple, of course, has been in the line of fire when it comes to tariff concerns. How much broader do we go in the buying of tech?

Yeah, I think, you know, as you pointed out, we had seen a very, very strong rally. We've seen that AI trade had been obviously very key across 2024 and hadn't been in play at all in 2025. And I think this potentially does mean that we are seeing a revival of that trade. But there is also the potential here for it to be broadened out. I mean, as you pointed out, Apple

has benefited greatly from more clarity regarding the um us and china and a de-escalation there other tech firms as well also can benefit there given that their manufacturing bases are so so strongly implemented in china so and there is a potential for that ai trade to broaden out and that's what we were looking for as we started into 2025 before we sort of saw

um all this tariff chaos um hit tech stock so i think there is that potential that as we get more clarity regarding the outlook for tariffs what the what this means that we could actually find that that broadening out of the ai trade does still take place in the latter part of 2025.

Okay, Fiona Sincotta, Senior Analyst at Citi Index Financial Markets. We are sticking with the images on your screen. U.S. President Donald Trump alongside Saudi Arabia's Crown Prince. They've arrived at the Saudi-U.S. Investment Forum. They're touring the various booths. There are a number of technology CEOs in attendance, including...

Nvidia CEO Jensen Huang, Elon Musk has been on stage talking about Starlink's authorization in the nation. $600 billion of investment secured is the headline figure. There are some deals within that. Mike Shepard is the editor that leads the intersection of our coverage between tech and politics. Mike, the politics part of it is whether explicitly we see a blanket deal between the US and Saudi Arabia for lead-edge semiconductors.

Well, that is what we're looking for, whether it is a blanket deal for one purchase en masse or really an agreement to allow the Saudis to have more access to chips on a need basis. And we have the new venture from the Saudis called Humane. It was just unveiled on Monday, as Jumana highlighted at the top of the show.

This is a venture that is going to be looking for those kinds of chips in larger and larger numbers. They've gotten started with a 500-megawatt data center that Jensen Wang talked about just an hour or so ago, but that will likely be just the start. The Saudis are looking to diversify their economy, and technology is one of the areas that they have chosen to place their bets.

They are looking to go beyond energy and all the familiar things that we've known about the Saudis and move into these other areas like technology, like health care and others that will make their economy durable and more diverse over the years to come. I mean, all of this is, as we see Middle East more broadly,

anticipating deals. We know that the trip is long, as you mentioned, Qatar is going to be visited. We know the UAE is as well. Are they all after the same thing? Is it the same industry groups that continue to be focused on as they make this particular trip across?

Absolutely, Carol. They are going to be looking at the tech hyperscalers, the big chip designers, makers and providers to help build and sustain the momentum for their AI ambitions and other ambitions in advanced technology.

The way they see it, data centers don't need to be located only within the continental United States. They see their position in the world as a place of strength. They see themselves as having the energy resources to be able to power those data centers and keep them running and power the AI revolution, not just from the U.S., but from another spot halfway around the world, Kara.

Going back to basics, okay, what we reported was, citing sources, that the United States wanted to do a deal with the Saudi Arabian government

to basically have an ad hoc arrangement outside of existing diffusion rules, which we know they won't do anyway. We kind of got that, as you explained with Humane. What other areas of the technology sector are hoping for something here? We heard from Jensen Huang, we heard from Elon Musk, and I believe Andy Jassy, the Amazon CEO, has something to say shortly as well.

Well, they all see opportunity in a region that is growing and that is sitting on vast wealth. And they see opportunities not only for just pure investment flows into the U.S. and into other projects that they may be seeing in other regions as well. Even outside the Gulf, they may be looking for that capital to help that

That power, that capex that we've been talking about so much by the hyperscalers and other big companies as well. But look, Ed, they are also looking at potentially consumer market in the Gulf region, in the Middle East. The growing and younger populations in Saudi Arabia, in the UAE, and in Qatar all have some appeal. And it's an area where they would like to make more than just a toehold. They really want to be able to expand there and partner with other businesses as well.

Mike Shepard standing by. We appreciate it. As we continue to see the live pictures of the Crown Prince, MBS, and alongside President Trump as they are about to take stage at this U.S.-Saudi Arabia Investment Conference, a forum where they will indeed continue to discuss what deals might be unfolded. But I want to go back to Fiona Sincotta, of course, who's standing by for us, because Fiona...

This comes on a day where inflation is cooler than expected. We have the geopolitical context still unfolding, whether or not on this trip to the Middle East, yes, it'll be about deals and about capitalism, but it's also about, well, trying to end wars with Russia, Ukraine, potentially a stop happening in Turkey is what the president has discussed. Also, maybe briefly meeting with a new Syrian leader. Fiona, are we seeing a broad risk on attitude or is this just seeing it in pockets like

technology right now no we've seen the risk the risk attitude across the board has improved considerably and particularly if we compare ourselves to where we were um a month ago or even just a couple of weeks ago um obviously there are still risks out there that need to be um

considered. You point out geopolitical risks, which very much remain. And obviously, you know, we've got that agreement with China for 90 days, but that could still be... We appreciate your time. We now return to Riyadh, where, as you can see, President Trump is indeed taking the stage with the Crown Prince of Saudi Arabia, MBS. Let's listen in as they are about to address a huge audience full of business leaders,

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