May 13, 2025 • 24 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss Nvidia’s plans to sell advanced semiconductors to Humain for a massive data center project in Saudi Arabia. Plus, City Index Senior Analyst Fiona Cincotta explains why markets aren’t out of the woods yet. All this as US President Donald Trump and Saudi Crown Prince Mohammed bin Salman meet in Riyadh to announce new investments.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:35):
Live from New York and San Francisco.
Speaker 3 (00:36):
This is Bloomberg Technology coming up. All eyes on Saudi
Arabia today as tech CEOs meet with President Trump and
Saudi Arabia's crown prints, plus.
Speaker 4 (00:46):
The Trump administration preparing to announce a deal that would
grant Saudi Arabia more access to advanced semiconductors.
Speaker 3 (00:53):
And Apple planning to improve iPhone battery life with AI
details later this hour, But first we.
Speaker 2 (00:59):
Check in on these markets.
Speaker 3 (01:01):
I bring you year to date. We re enter a
ball market on the NASA one hundred, and now we
push higher on the Nazak one hundred to seventy tens
percent 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 and leading the charge higher.
Speaker 5 (01:19):
Ed.
Speaker 3 (01:19):
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.
Speaker 4 (01:26):
Yeah, the single most important tech name. We're focused on Nvidia.
The stock has really surged in the last thirty minutes
or so. A deal with Saudi Arabia's Humane eighteen thousand
Blackwell GPO used in the first phase going into a
five hundred megawatt data center, small in hyperscale terms, but
significant because of access to cutting edge technology for that nation.
(01:47):
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.
Speaker 3 (01:59):
There is, And let's get the context. Bloomberg's Jamana Bissecchi
is joining us now live from Saudi Arabia. We've just
heard from Elo Musk on stage, of course, anticipating the
US President to be there with the Crown Prince. Just
give us the context of what is happening right now.
Speaker 6 (02:17):
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 SAIDI Arabia pledging to go up to
one hundred and forty two billion dollars worth of arms
and weaponry from the US. A dozen defense companies involved
(02:39):
in that. The headline figure six hundred billion dollars worth
of Saudi investment committed to be invested in the US
over the coming years. Not a lot of detail yet,
and that is a number that we've heard before. But
then at the technology side, some massive announcements coming through
just in the last hour, and of note is the
one that Ed was just talking about with Human So
(03:00):
this was the AI investment vehicle that the Crown Prince
announced was being launched yesterday in anticipation of today, So
this is a new venture 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 up to eighteen thousand Nvidia
(03:22):
at GB three hundred Grace Blackwell chips. So those are
those chips, of course, that Sadi 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
(03:42):
up to this trip, which was that the Trump administration
are rescinding those Biden instituted diffusion rules that were set
to come in place. And earlier on we heard from
David Sachs, who was the crypto AISAR, 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.
(04:03):
And of course coming up with these bilateral agreements, this
big one today with Nvidia and.
Speaker 4 (04:09):
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 eighteen thousand GPUs.
We will hear from President Trump and Crown Prince Mohammed
(04:30):
bin Salman later in Riad set the scene for us
of what's to come and what kind of further details
we're looking out for Jamana.
Speaker 6 (04:40):
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 ten to fifteen 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 are are 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
(05:03):
for this group photo. Because so many of these deals
have been signed, and just to give you to run
through some of the other deals that also came out today, Aramco,
for example, the state oil company, saying that they're looking
to spend three point four billion dollars to expand their
refineries in the US. There's a health solutions firm that
(05:25):
has also said that they are coming together with US
to partner on five point eight billion dollars building a
plant in the United States as well. Another big announcement
on the airlines front, an airline leasing company called Abby
Lease in Saudi Arabia have also committed to buying four
point eight billion dollars worth of Boeing seven three seven
eight jets, So that's also been a big focus for
(05:46):
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 fronts. And then, of course
we spoke about this big defense deal one hundred and
forty two billion dollars a worth of defense agreements secured
between the US and Saudi Arabia. From a geopolitical perspective
as well, that is key for Saudi Arabia. They have
(06:08):
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 at 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 presidents.
Speaker 4 (06:26):
And the Crown Prince Sorly Bloomberger's Jumana Bdecci, 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 Shephard joins us, Now it
(06:46):
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 five megawatts data center,
which isn't huge frankly, in the scheme of hyperscale data centers.
What do we know about where this kind of BILA
(07:09):
stands between the two nations.
Speaker 5 (07:12):
Well, we're still waiting to see 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 am D that are needed to power the kingdom's
(07:34):
AI ambitions. That five hundred megawatt data center that you
just alluded to is just the start. Really, and as
Jamana outlined in her opener there, the Biden Trump administration
is moving away from Biden era of rules that set
these three broad categories of access governing countries' ability to
(07:55):
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
(08:17):
individual deals. The US 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 to that
also has been in the work. These golf nations, like
so many others, are seeking access to these chips, and
they're imploring the Trump administration to take some steps to
(08:38):
make it easier.
Speaker 3 (08:39):
This is a broad trip to the Middle East. We'll
get onto the UA in a moment. But some breaking
news that President Trump is indeed set to meet the
Syrian president in Saudi Arabia. This is acording to a
US official, and Trump himself had said the US may
relieve sanctions on Syria to give the country quote a
fresh start that being reported in previous days. My so
(09:00):
this is a broad geopolitical conversation. We have go back
to really what we focus on in tech. The fact
that these deals is 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 YA Cloud or indeed by
redistribution by those countries.
Speaker 5 (09:22):
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 re election and taking office, and
other nations will be looking to how the UAE and
Saudi government arrange a new understanding with the Trump administration
when it comes to access to advanced technology. This could
(09:44):
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
AIK abilities, and right now in Nvidia and AMD are
the biggest names and really the only game in town.
Speaker 4 (10:07):
I want to go back to the politics of this mic.
It shows us in our reporting that the Trump administration
is more willing than the Biden administration were to allow
the movement of US technology to the Gulf region.
Speaker 5 (10:21):
That's absolutely right ed, and we've heard this signal from
the President on down. His AI advisor David Sachs has
really reflected that quite publicly on Accident and others public
statements recently where he has said, look, this AI diffusion
rule from the Biden team, maybe it was well spirited
and trying to keep China from gaining access to US technology,
(10:42):
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 U allies that are seen as trusted.
Speaker 3 (11:02):
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
Vin Salman MBS as he has known more largely. This is,
of course, as they're going to take the stage themselves.
All of this is that the Saudi US Investment Forum
currently upon US in Riad, where we are seeing deals
(11:24):
be unfolded, where we're seeing plenty of US executives take
to the stage and we are about to hear from
the President and the Crown prints 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
(11:44):
key area that President Trump wants to see billions be
exchanged for.
Speaker 2 (11:50):
Well, that's right.
Speaker 5 (11:51):
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 Cutter, it
really is about bringing investment to the US. This has
been his mission since taking office. We saw on his
(12:14):
first full day in office that big soft 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 and other
countries to send more business to the US to get
manufacturing here, but also to ensure that there is an
(12:36):
American stamp on all of this technology that we are seeing.
Speaker 3 (12:39):
Caro Michael Shepherd standing by for us. We appreciate it
will come back to you in a moment.
Speaker 2 (12:44):
But as we.
Speaker 3 (12:45):
See the President of the United States gather with the
Crown Prince over in read, we're going to set you
to the market reaction right now because Fionda sin Culture
is standing by scene arounalyst. The City Index financial markets
look today, we do have a risk on attitude. We
are seeing the NASA cup more than one percent let's
call it one and a half percent at the moment,
deals unfolded, but also the China US calming in terms
(13:08):
of the ratcheting up of tariffs. What do you think
about buying into these names right now?
Speaker 7 (13:14):
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 NAVSDAK one handri Esa up around
four point three percent.
Speaker 2 (13:29):
Seeing those games extended today.
Speaker 7 (13:31):
Up around one point four percent, So the mood is
definitely upbeat as far as these stocks are concerned.
Speaker 2 (13:36):
And it does.
Speaker 7 (13:37):
Feel that, it does feel that the sentiment is changing
and that the outlook is more positive. You know, we're
past that worst case scenario. We seem to be looking
at a more positive.
Speaker 2 (13:50):
Upbeat outlook.
Speaker 7 (13:51):
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 tarift tar of issues which haven't
been resolved, particularly around sort of electronics and semiconductors that
we had heard.
Speaker 2 (14:05):
The White House say that they were sort of putting back.
Speaker 7 (14:11):
So we still need to get a little bit more
clarification about that. But as far as the de escalation
of the trade will with China is concerned, as far
as this push for deals in Saudi Arabia is concerned
in UA, that's.
Speaker 4 (14:25):
Really important, Fiona, the President's standing next to MBS, but
also Saudi Arabia's investment Minister Khalid Alfhali 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 the US proxy that's set to benefit or is
Saudi accessible to your clients?
Speaker 5 (14:48):
No?
Speaker 2 (14:48):
So it would be through the US proxy.
Speaker 7 (14:50):
That's where we'd be focusing attention, and I think that's
where the most popular sort of trades would.
Speaker 2 (14:55):
Be looking as well.
Speaker 7 (14:56):
That's what's most easily accessible and potential.
Speaker 2 (15:00):
The I would like.
Speaker 7 (15:01):
To see less risk adverse, but I mean, that's what
we just need to focus on at the moment, is
where is the access to this?
Speaker 2 (15:07):
And yeah, through the US proxies.
Speaker 7 (15:09):
I mean, obviously, chip stocks are the area that we've
been looking at, very focused at recently.
Speaker 2 (15:14):
Those are the areas that are continuing to push higher.
Speaker 4 (15:17):
Today video is up more than five percent. How big
a deal is this for them to get access to
the Saudi market.
Speaker 7 (15:25):
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
(15:46):
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.
Speaker 3 (15:58):
And what's been sowing the willingness to buy back into
generative AI trade or to these AI infrastructure players 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 tip for tap, that it
becomes embroiled within the overall tariff conversations on a country
(16:19):
by country basis. Fiona, is that a positive? Does that
even mean that maybe we'll have Jensen one having access
still to China in some way.
Speaker 2 (16:28):
Potentially? I mean, I think what you say is true.
Speaker 7 (16:30):
There has been more clarity than what there was, but
I don't think everything is as clear as it could be.
Speaker 2 (16:37):
For investors still.
Speaker 7 (16:38):
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.
Speaker 2 (16:48):
Is some sort of form of clarity, and because we.
Speaker 7 (16:50):
Are moving slowly and steadily towards a sort of more
clearer understanding, of what Trump is looking for, what Trump's
aiming for.
Speaker 2 (17:00):
Then that obviously does help the investors take their decisions.
Speaker 3 (17:03):
Does it then become all about the twenty twenty four
trade in video AMD once again the infrastructure play? Do
we broaden in 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?
Speaker 2 (17:20):
Yeah?
Speaker 7 (17:20):
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 twenty twenty four
and hadn't been in play at all in twenty twenty five,
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.
Speaker 2 (17:40):
I mean, as you pointed out.
Speaker 7 (17:41):
Apple has benefited greatly from more clarity regarding the US
and China and a de escalation there.
Speaker 2 (17:50):
Other tech firms as well also can benefit.
Speaker 7 (17:52):
They've given that their manufacturing bases are so strongly implemented
in China. So there is a potential for that AI
trade now, and that's what we were looking for. As
we started into twenty twenty five before we sort of
saw all this tariff chaos hit tech socks. So I
think there is that potential that as we get more clarity.
Speaker 2 (18:12):
Regarding the outlook for tariffs, what.
Speaker 7 (18:15):
This means that we could actually find that that broadening
out of the AI trade does still take place in
the latter parts of twenty twenty five.
Speaker 4 (18:24):
Okay, if you honest thing called a Seni analyst, that
city index financial markets, we are sticking with the images
on your screen. US President Donald Trump alongside Saudi Arabia's
crown prints. They've arrived at the Saudi US Investment Forum.
They're touring the various booths. There are a number of
technology CEOs in attendance, including Nvidia CEO Jensen Huang. Elon
(18:46):
Musk has been in stage talking about Starlink's authorization in
the nation six hundred billion dollars of investment security as
the headline figure. There are some deals within that. Mike
Shephard 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
(19:08):
the US and Saudi Arabia the lead edge semiconductors.
Speaker 5 (19:12):
Well, that is what we're looking for, whether it is
a blanket deal for one purchase en Mass or really
in 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
(19:34):
be looking for those kinds of chips in larger and
larger numbers. They've gotten started with a five hundred megawant
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 where they are looking to go beyond
(19:56):
energy and all the familiar things that we've known about
the Saudias and move into these other areas like technology,
like healthcare and others that will make their economy durable
and more diverse over the years of time.
Speaker 3 (20:12):
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, KASA 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 group, well, this particular trip across.
Speaker 5 (20:32):
Absolutely, Caro. 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 technologies. The way they see
a data centers don't need to be located only within
(20:53):
the continental United States. They see their position in the
world as a place of strength. They see themselves of
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 US, but from another spot
halfway around the world.
Speaker 4 (21:12):
Cara, 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
(21:35):
technology sector are hoping for something here. We heard from
Jensen One, we heard from Elon Musk, and I believe
Andy Jasse, the Amazon CEO, has something to say shortly
as well.
Speaker 2 (21:46):
Well.
Speaker 5 (21:46):
They all see opportunity in a region that is growing
and that is sitting on verse wealth, and they see
opportunities not only for just pure investment flows into the
US 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 power
(22:09):
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 Golf region in the Middle East, The growing and
younger populations in Saudi Arabia, in the UAE and in
cutter all have some appeal and it's an area where
(22:29):
they would like to make more than just a toe hold.
They really want to be able to expand there and
partner with other businesses as well.
Speaker 3 (22:37):
Mike Shepherd standing by, we appreciate it as we continue
to see the live pictures of the Crown Prince Mas
and alongside President Trump as they are about to take
stage at this US Saudi Arabia Investment Conference, the forum
where they will indeed continue to discuss what deals might
be unfolded. But I want to go back to fionness
(22:57):
and culture of course 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 we're 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
(23:19):
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?
Speaker 7 (23:29):
Now we've seen the risk attitude across the board has
improved considerably, particularly if we compare ourselves to where we
were a month ago or even just a couple of
weeks ago. Obviously there are still risks out there that
need to be considered. You point out geopolitical risks which
(23:50):
very much remain, and obviously you know we've got that
agreement with China for ninety days, but that could still
be also.
Speaker 3 (23:59):
We appreciate time. We now return to read whereas you
can see, President Trump is indeed taking the stage with
the Crown Prince for Saudi Arabia MBS. Let's listen in
as they are about to address a huge audience full
of business leaders from both the Middle East and indeed
from the United States.
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:35):
Live from New York and San Francisco.
Speaker 3 (00:36):
This is Bloomberg Technology coming up. All eyes on Saudi
Arabia today as tech CEOs meet with President Trump and
Saudi Arabia's crown prints, plus.
Speaker 4 (00:46):
The Trump administration preparing to announce a deal that would
grant Saudi Arabia more access to advanced semiconductors.
Speaker 3 (00:53):
And Apple planning to improve iPhone battery life with AI
details later this hour, But first we.
Speaker 2 (00:59):
Check in on these markets.
Speaker 3 (01:01):
I bring you year to date. We re enter a
ball market on the NASA one hundred, and now we
push higher on the Nazak one hundred to seventy tens
percent 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 and leading the charge higher.
Speaker 5 (01:19):
Ed.
Speaker 3 (01:19):
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.
Speaker 4 (01:26):
Yeah, the single most important tech name. We're focused on Nvidia.
The stock has really surged in the last thirty minutes
or so. A deal with Saudi Arabia's Humane eighteen thousand
Blackwell GPO used in the first phase going into a
five hundred megawatt data center, small in hyperscale terms, but
significant because of access to cutting edge technology for that nation.
(01:47):
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.
Speaker 3 (01:59):
There is, And let's get the context. Bloomberg's Jamana Bissecchi
is joining us now live from Saudi Arabia. We've just
heard from Elo Musk on stage, of course, anticipating the
US President to be there with the Crown Prince. Just
give us the context of what is happening right now.
Speaker 6 (02:17):
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 SAIDI Arabia pledging to go up to
one hundred and forty two billion dollars worth of arms
and weaponry from the US. A dozen defense companies involved
(02:39):
in that. The headline figure six hundred billion dollars worth
of Saudi investment committed to be invested in the US
over the coming years. Not a lot of detail yet,
and that is a number that we've heard before. But
then at the technology side, some massive announcements coming through
just in the last hour, and of note is the
one that Ed was just talking about with Human So
(03:00):
this was the AI investment vehicle that the Crown Prince
announced was being launched yesterday in anticipation of today, So
this is a new venture 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 up to eighteen thousand Nvidia
(03:22):
at GB three hundred Grace Blackwell chips. So those are
those chips, of course, that Sadi 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
(03:42):
up to this trip, which was that the Trump administration
are rescinding those Biden instituted diffusion rules that were set
to come in place. And earlier on we heard from
David Sachs, who was the crypto AISAR, 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.
(04:03):
And of course coming up with these bilateral agreements, this
big one today with Nvidia and.
Speaker 4 (04:09):
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 eighteen thousand GPUs.
We will hear from President Trump and Crown Prince Mohammed
(04:30):
bin Salman later in Riad set the scene for us
of what's to come and what kind of further details
we're looking out for Jamana.
Speaker 6 (04:40):
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 ten to fifteen 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 are are 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
(05:03):
for this group photo. Because so many of these deals
have been signed, and just to give you to run
through some of the other deals that also came out today, Aramco,
for example, the state oil company, saying that they're looking
to spend three point four billion dollars to expand their
refineries in the US. There's a health solutions firm that
(05:25):
has also said that they are coming together with US
to partner on five point eight billion dollars building a
plant in the United States as well. Another big announcement
on the airlines front, an airline leasing company called Abby
Lease in Saudi Arabia have also committed to buying four
point eight billion dollars worth of Boeing seven three seven
eight jets, So that's also been a big focus for
(05:46):
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 fronts. And then, of course
we spoke about this big defense deal one hundred and
forty two billion dollars a worth of defense agreements secured
between the US and Saudi Arabia. From a geopolitical perspective
as well, that is key for Saudi Arabia. They have
(06:08):
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 at 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 presidents.
Speaker 4 (06:26):
And the Crown Prince Sorly Bloomberger's Jumana Bdecci, 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 Shephard joins us, Now it
(06:46):
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 five megawatts data center,
which isn't huge frankly, in the scheme of hyperscale data centers.
What do we know about where this kind of BILA
(07:09):
stands between the two nations.
Speaker 5 (07:12):
Well, we're still waiting to see 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 am D that are needed to power the kingdom's
(07:34):
AI ambitions. That five hundred megawatt data center that you
just alluded to is just the start. Really, and as
Jamana outlined in her opener there, the Biden Trump administration
is moving away from Biden era of rules that set
these three broad categories of access governing countries' ability to
(07:55):
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
(08:17):
individual deals. The US 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 to that
also has been in the work. These golf nations, like
so many others, are seeking access to these chips, and
they're imploring the Trump administration to take some steps to
(08:38):
make it easier.
Speaker 3 (08:39):
This is a broad trip to the Middle East. We'll
get onto the UA in a moment. But some breaking
news that President Trump is indeed set to meet the
Syrian president in Saudi Arabia. This is acording to a
US official, and Trump himself had said the US may
relieve sanctions on Syria to give the country quote a
fresh start that being reported in previous days. My so
(09:00):
this is a broad geopolitical conversation. We have go back
to really what we focus on in tech. The fact
that these deals is 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 YA Cloud or indeed by
redistribution by those countries.
Speaker 5 (09:22):
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 re election and taking office, and
other nations will be looking to how the UAE and
Saudi government arrange a new understanding with the Trump administration
when it comes to access to advanced technology. This could
(09:44):
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
AIK abilities, and right now in Nvidia and AMD are
the biggest names and really the only game in town.
Speaker 4 (10:07):
I want to go back to the politics of this mic.
It shows us in our reporting that the Trump administration
is more willing than the Biden administration were to allow
the movement of US technology to the Gulf region.
Speaker 5 (10:21):
That's absolutely right ed, and we've heard this signal from
the President on down. His AI advisor David Sachs has
really reflected that quite publicly on Accident and others public
statements recently where he has said, look, this AI diffusion
rule from the Biden team, maybe it was well spirited
and trying to keep China from gaining access to US technology,
(10:42):
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 U allies that are seen as trusted.
Speaker 3 (11:02):
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
Vin Salman MBS as he has known more largely. This is,
of course, as they're going to take the stage themselves.
All of this is that the Saudi US Investment Forum
currently upon US in Riad, where we are seeing deals
(11:24):
be unfolded, where we're seeing plenty of US executives take
to the stage and we are about to hear from
the President and the Crown prints 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
(11:44):
key area that President Trump wants to see billions be
exchanged for.
Speaker 2 (11:50):
Well, that's right.
Speaker 5 (11:51):
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 Cutter, it
really is about bringing investment to the US. This has
been his mission since taking office. We saw on his
(12:14):
first full day in office that big soft 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 and other
countries to send more business to the US to get
manufacturing here, but also to ensure that there is an
(12:36):
American stamp on all of this technology that we are seeing.
Speaker 3 (12:39):
Caro Michael Shepherd standing by for us. We appreciate it
will come back to you in a moment.
Speaker 2 (12:44):
But as we.
Speaker 3 (12:45):
See the President of the United States gather with the
Crown Prince over in read, we're going to set you
to the market reaction right now because Fionda sin Culture
is standing by scene arounalyst. The City Index financial markets
look today, we do have a risk on attitude. We
are seeing the NASA cup more than one percent let's
call it one and a half percent at the moment,
deals unfolded, but also the China US calming in terms
(13:08):
of the ratcheting up of tariffs. What do you think
about buying into these names right now?
Speaker 7 (13:14):
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 NAVSDAK one handri Esa up around
four point three percent.
Speaker 2 (13:29):
Seeing those games extended today.
Speaker 7 (13:31):
Up around one point four percent, So the mood is
definitely upbeat as far as these stocks are concerned.
Speaker 2 (13:36):
And it does.
Speaker 7 (13:37):
Feel that, it does feel that the sentiment is changing
and that the outlook is more positive. You know, we're
past that worst case scenario. We seem to be looking
at a more positive.
Speaker 2 (13:50):
Upbeat outlook.
Speaker 7 (13:51):
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 tarift tar of issues which haven't
been resolved, particularly around sort of electronics and semiconductors that
we had heard.
Speaker 2 (14:05):
The White House say that they were sort of putting back.
Speaker 7 (14:11):
So we still need to get a little bit more
clarification about that. But as far as the de escalation
of the trade will with China is concerned, as far
as this push for deals in Saudi Arabia is concerned
in UA, that's.
Speaker 4 (14:25):
Really important, Fiona, the President's standing next to MBS, but
also Saudi Arabia's investment Minister Khalid Alfhali 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 the US proxy that's set to benefit or is
Saudi accessible to your clients?
Speaker 5 (14:48):
No?
Speaker 2 (14:48):
So it would be through the US proxy.
Speaker 7 (14:50):
That's where we'd be focusing attention, and I think that's
where the most popular sort of trades would.
Speaker 2 (14:55):
Be looking as well.
Speaker 7 (14:56):
That's what's most easily accessible and potential.
Speaker 2 (15:00):
The I would like.
Speaker 7 (15:01):
To see less risk adverse, but I mean, that's what
we just need to focus on at the moment, is
where is the access to this?
Speaker 2 (15:07):
And yeah, through the US proxies.
Speaker 7 (15:09):
I mean, obviously, chip stocks are the area that we've
been looking at, very focused at recently.
Speaker 2 (15:14):
Those are the areas that are continuing to push higher.
Speaker 4 (15:17):
Today video is up more than five percent. How big
a deal is this for them to get access to
the Saudi market.
Speaker 7 (15:25):
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
(15:46):
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.
Speaker 3 (15:58):
And what's been sowing the willingness to buy back into
generative AI trade or to these AI infrastructure players 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 tip for tap, that it
becomes embroiled within the overall tariff conversations on a country
(16:19):
by country basis. Fiona, is that a positive? Does that
even mean that maybe we'll have Jensen one having access
still to China in some way.
Speaker 2 (16:28):
Potentially? I mean, I think what you say is true.
Speaker 7 (16:30):
There has been more clarity than what there was, but
I don't think everything is as clear as it could be.
Speaker 2 (16:37):
For investors still.
Speaker 7 (16:38):
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.
Speaker 2 (16:48):
Is some sort of form of clarity, and because we.
Speaker 7 (16:50):
Are moving slowly and steadily towards a sort of more
clearer understanding, of what Trump is looking for, what Trump's
aiming for.
Speaker 2 (17:00):
Then that obviously does help the investors take their decisions.
Speaker 3 (17:03):
Does it then become all about the twenty twenty four
trade in video AMD once again the infrastructure play? Do
we broaden in 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?
Speaker 2 (17:20):
Yeah?
Speaker 7 (17:20):
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 twenty twenty four
and hadn't been in play at all in twenty twenty five,
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.
Speaker 2 (17:40):
I mean, as you pointed out.
Speaker 7 (17:41):
Apple has benefited greatly from more clarity regarding the US
and China and a de escalation there.
Speaker 2 (17:50):
Other tech firms as well also can benefit.
Speaker 7 (17:52):
They've given that their manufacturing bases are so strongly implemented
in China. So there is a potential for that AI
trade now, and that's what we were looking for. As
we started into twenty twenty five before we sort of
saw all this tariff chaos hit tech socks. So I
think there is that potential that as we get more clarity.
Speaker 2 (18:12):
Regarding the outlook for tariffs, what.
Speaker 7 (18:15):
This means that we could actually find that that broadening
out of the AI trade does still take place in
the latter parts of twenty twenty five.
Speaker 4 (18:24):
Okay, if you honest thing called a Seni analyst, that
city index financial markets, we are sticking with the images
on your screen. US President Donald Trump alongside Saudi Arabia's
crown prints. They've arrived at the Saudi US Investment Forum.
They're touring the various booths. There are a number of
technology CEOs in attendance, including Nvidia CEO Jensen Huang. Elon
(18:46):
Musk has been in stage talking about Starlink's authorization in
the nation six hundred billion dollars of investment security as
the headline figure. There are some deals within that. Mike
Shephard 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
(19:08):
the US and Saudi Arabia the lead edge semiconductors.
Speaker 5 (19:12):
Well, that is what we're looking for, whether it is
a blanket deal for one purchase en Mass or really
in 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
(19:34):
be looking for those kinds of chips in larger and
larger numbers. They've gotten started with a five hundred megawant
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 where they are looking to go beyond
(19:56):
energy and all the familiar things that we've known about
the Saudias and move into these other areas like technology,
like healthcare and others that will make their economy durable
and more diverse over the years of time.
Speaker 3 (20:12):
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, KASA 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 group, well, this particular trip across.
Speaker 5 (20:32):
Absolutely, Caro. 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 technologies. The way they see
a data centers don't need to be located only within
(20:53):
the continental United States. They see their position in the
world as a place of strength. They see themselves of
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 US, but from another spot
halfway around the world.
Speaker 4 (21:12):
Cara, 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
(21:35):
technology sector are hoping for something here. We heard from
Jensen One, we heard from Elon Musk, and I believe
Andy Jasse, the Amazon CEO, has something to say shortly
as well.
Speaker 2 (21:46):
Well.
Speaker 5 (21:46):
They all see opportunity in a region that is growing
and that is sitting on verse wealth, and they see
opportunities not only for just pure investment flows into the
US 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 power
(22:09):
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 Golf region in the Middle East, The growing and
younger populations in Saudi Arabia, in the UAE and in
cutter all have some appeal and it's an area where
(22:29):
they would like to make more than just a toe hold.
They really want to be able to expand there and
partner with other businesses as well.
Speaker 3 (22:37):
Mike Shepherd standing by, we appreciate it as we continue
to see the live pictures of the Crown Prince Mas
and alongside President Trump as they are about to take
stage at this US Saudi Arabia Investment Conference, the forum
where they will indeed continue to discuss what deals might
be unfolded. But I want to go back to fionness
(22:57):
and culture of course 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 we're 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
(23:19):
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?
Speaker 7 (23:29):
Now we've seen the risk attitude across the board has
improved considerably, particularly if we compare ourselves to where we
were a month ago or even just a couple of
weeks ago. Obviously there are still risks out there that
need to be considered. You point out geopolitical risks which
(23:50):
very much remain, and obviously you know we've got that
agreement with China for ninety days, but that could still
be also.
Speaker 3 (23:59):
We appreciate time. We now return to read whereas you
can see, President Trump is indeed taking the stage with
the Crown Prince for Saudi Arabia MBS. Let's listen in
as they are about to address a huge audience full
of business leaders from both the Middle East and indeed
from the United States.
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