The Rundown - Deep Dive: Trump's AI Gamble with Saudi Arabia

Episode Date: May 17, 2025

President Trump and Saudi Arabia announced $600 billion worth of deals to help bolster the Middle Eastern country's AI and defense capabilities. In this episode, we explore Saudi Arabia's goal to reshape itself into a dominant player on the world stage and why the U.S. is making the country a key AI partner. The content of the video is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures.Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Welcome back to the rundown for another weekend deep dive. Today, we are talking about Saudi Arabia, the oil-rich Middle Eastern country that's trying to reinvent itself by betting big on AI. The kingdom hosted President Trump this week along with tech royalties like Elon Musk, Jensen Huang, and others. And in the process, they announced billions of dollars and deals. So in today's episode, we're going to break down the deals made during the Saudi U.S. Investment Forum in Riyadh. Companies like Nvidia, AMD, Palantir, and Moore lined up to sell their chips, software, and services to the kingdom. And we'll also get into why not everyone is thrilled about these deals. You got a great show for you today.

Let's dive in. Saudi Arabia's economy, like many Middle Eastern countries, has long been powered by oil. Even today, oil makes up about 30 to 40% of their GDP. And it's that oil money that's paid for all the giant, shiny skyscrapers in the desert. But things are starting to change. The kingdom is now being led by a young crown prince, Muhammad bin Salman, also known as MBS. And the dude's not even 40 yet, but he has a bold plan to reshape the future of Saudi Arabia. It's called Vision 2030.

And at the center of that vision is the public investment fund, or PIF, Saudi Arabia's $1 trillion sovereign wealth fund. And this is the money that MBS is using to invest in big ideas. and launch even bigger projects. The PIF has poured money into companies like Uber and Lucid Motors. They're also backing other tech companies and AI firms. We're going to get into that in a bit. A famous example of the influence of Saudi money has been the live tour in golf. This tour was created a few years ago and started poaching players from the PGA tour

by offering these golf stars nine-figure contracts. And beyond just the golf stuff, they're expanding into other sports as well. Like a UFC event was held in Saudi Arabia earlier this year. multiple WWE events and there's now an F1 race held in the Saudi city of Jeddah every year. And beyond just the sports stuff, some of their other plans are totally wild. They're planning to spend $500 billion to build a futuristic megacity called Nome right on the Red Sea. At the center of the Neom project is the line, which is supposed to be a 100 mile long linear city. It looks like it's something out of a black mirror episode.

The plan is for the city to house around 9 million people by 2030. I got a feeling that they're probably not going to hit that target. But look, the vision is clear. Muhammad bin Salman wants to turn Saudi Arabia into a modern, innovative powerhouse with AI, humanoid robots, and maybe even jet packs. And he's hoping that all the deals that the kingdom signed this week with U.S. tech companies is going to help make that future into a reality. So let's talk about some of these big deals that were announced this week.

Saudi Arabia hosted President Donald Trump along with a stacked list of U.S. CEOs at the Saudi U.S. Investment Forum in Riyadh. And the stacked guest list included people like Elon Musk, Jensin Wong, Sam Altman, Andy Jassy, Larry Fink. I mean, this thing was like the Met Gala for billionaires. And during this conference, a lot of major deals were announced, most of them between American companies and Saudi Arabia. Let's start with the headliner deal, which was NVIDIA. NVIDIA is going to sell 18,000 Blackwell AI chips to the Saudi-backed AI company Humane. And these chips are going to power local Saudi data centers as the kingdom tries to build

their own AI models. But that's not all. NVIDIA is also giving humane access to their Omniverse technology, which is their AI simulation platform. This tech can be used to train robots and run automated factories, maybe even build a robot Army. AMD also jumped in on the fund. They're doing a $10 billion joint investment into AI infrastructure with Humane. And then Amazon Web Services signed a $5 billion deal to expand cloud computing into the region. Oh, and then don't forget about Palantir, they kind of deal to grow its AI-powered

defense and logistics tools in the kingdom. But this wasn't just a tech love fest. Defense played a big role here as well. The U.S. signed a $142 billion arms deal with Saudi Arabia. And This deal includes upgrades to their Air Force, Cybersecurity, Missile Defense, and their space program. Now, no specific companies were named, but I got a strong feeling that Lockheed Martin is probably having a pretty good weekend right now. And by the way, Trump didn't just make deals with Saudi Arabia this weekend. Other Arab countries got in on the action as well. Qatar Airlines placed the largest jet order in history, 210 jets from Boeing, which is a huge win for the American jet maker. And then the UAE announced a multi-billion dollar deal to import over five.

500,000 AI chips, along with a joint deal with the U.S. to build and operate a massive AI data center campus in Abu Dhabi. So essentially, Trump showed up to the Middle East this week with AI chips and military contracts and a handshake, and Arab countries showed up with giant checkbooks. But you know, not everyone is happy with all the deals that went down this week, even some people in Trump's own administration. So let's talk about it. So Saudi Arabia obviously wants to be a major player in AI. And let's be real, they seem to have unlimited money to make that happen. But not everyone here in the U.S. is cheering on these AI chip deals. In fact, the Biden administration had imposed new export restrictions on advanced AI chips. They were called the AI diffusion rule.

But the Trump administration recently reversed those rules right as they were about to go into effect. But still, not everyone in Trump's camp is on board with that reversal. Some Trump officials want tighter controls of these AI chips, arguing that without guardrails, these AI chips could end up in Chinese hands. But then on the other hand, you have people like David Sacks, Trump's AI czar. He's taking a different approach. David Sacks believes the best way to beat China in the AI race is to flood the market with American chips and software and to make sure that global infrastructure runs on U.S. tech and not Chinese tech.

Like if the U.S. government was to block Saudi Arabia from buying NVIDIA or A&B chip, Well, then they might just turn to China and buy chips from Huawei or other Chinese tech companies. And we know that China is already making some big moves in AI. Earlier this year, a Chinese AI startup Deepseek released a state-of-the-art AI model for a fraction of the cost of Open AI's model. And we're getting constant reports that Huawei continues to push ahead with their AI chip development. So with that perspective, it's probably better to lock in deals with Saudi Arabia with US tech and keep the money flowing into American companies like Nvidia.

AMD and Amazon. And it's not just about profits. It's also about geopolitical influence and making sure that U.S. tech remains the global standard. And I got a feeling that Saudi Arabia and Nvidia investors are pretty happy with that decision. So what's the takeaway here? Well, to me, it's clear that Saudi Arabia

doesn't just want to be the oil guy anymore. Crown Prince Mohammed bin Salman is trying to turn the country into a global leader in innovation and AI. And the Trump administration, despite some hesitation from within, seems to be happy to help. American tech companies are walking away with billions of dollars in new deals, while Chinese companies are getting boxed out of the region. Now, not everyone is convinced this is a good idea.

Some worry that giving countries like Saudi Arabia access to U.S. tech could eventually lead to them overtaking the U.S. in AI dominance. And it's possible the next decade of global power might come down to who builds the biggest and fastest AI infrastructure. And MBS seems to realize that if Saudi Arabia wants to be taken seriously at the global stage and be seen as something than just an oil-producing country, they're going to have to make those investments now. Well, all right, guys, that's it for today's weekend, deep dive.

Hope you guys enjoyed this episode. If you did and you have like eight extra seconds, consider giving us a five-star rating on Apple or Spotify. And if you're listening on Spotify, don't forget to comment on this episode. and let us know what topics you want us to cover in future deep dive episodes. Thank you guys again for spending a part of your weekend with us. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here on Monday.