WSJ What’s News - Will a U.S. Nuclear Deal Push Saudi Arabia to Recognize Israel?

Episode Date: August 26, 2026

A.M. Edition for Aug. 26. President Trump sends his landmark nuclear accord with Saudi Arabia to Congress for review, kicking off what’s likely to be months of debate among lawmakers. Oxford Analytica’s Rawan Maayeh breaks down whether the kingdom is likely to normalize relations with Israel as a part of the deal, as Trump has insisted. Plus, Bill Gates issues a stark warning on AI’s impact on jobs and humanity, saying big tech has “no plan”. And we look ahead to Nvidia’s earnings, with sky-high investor expectations for the world’s most valuable company. And Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

President Trump sends a landmark nuclear accord with Saudi Arabia to Congress. Plus, Darlene Graham wins a tight runoff in South Carolina. And it's the Super Bowl for AI investors, as the world's most valuable company prepares to report earnings. If NVIDIA were to report a disappointing quarter, that could have a cascading effect, not just insofar as the stock market could stop going higher, but also it could ripple through down to consumer spending and have a larger impact for the U.S. and global economy. It's Wednesday, August 26th. I'm Luke Vargas for the Wall Street Journal. And here is the AM edition of What's News, the top headlines and business stories moving your world today.

We are exclusively reporting that President Trump has sent his nuclear agreement with Saudi Arabia to the U.S. Congress. lawmakers there are expected to spend months debating the deal, which attempts to promote the U.S. nuclear industry without sparking wider nuclear proliferation in the Middle East. Rwann Maya is a senior analyst for the Middle East in North Africa at Oxford Analytica. Rwan, I should say that journal reporters in D.C. say it's going to be hard for lawmakers to block this deal, regardless of any misgivings they may have about it, since that would require a joint resolution and a two-thirds vote to override a potential Trump veto. However, I still think there's some value in looking at the open questions around this deal, or at least two of them. The first being,

is Saudi Arabia going to normalize relations with Israel? This is a condition that President Trump announced actually last month after the deal had been negotiated and signed. What are we hearing from the Saudis on that? I think first it's quite important to say that there was quite a bit of domestic U.S. opposition to the deal once it was announced. And so once Trump came out with that condition, it felt more as if it was a knee-jerk reaction wanting to temper down that opposition. So that begs the question as to how far would the administration be willing to apply that condition? How stringently is it going to apply it? We've seen the administration try to, in a way, sell the deal by playing up the benefit to US companies, to US jobs.

So that, for me, brings out the question of whether that condition will in fact be applied quite stringently or not. But we have to also bear in mind that Trump was not the first person to come up with this condition. So this idea of having a whole grand bargain between Saudi Arabia and the US, goes back to the Biden administration at the time. They were discussing this idea of having a nuclear civil program, enhanced security guarantees from the U.S., access to U.S. technology, and Saudi Arabia in return would move towards normalization with Israel. But even then, it would also be contingent on Israel moving down, taking steps towards an reversible path to a Palestinian state. Obviously, since then circumstances in the region have changed

fundamentally, the Gaza war has suspended progress on normalization talks. Israeli actions in the region, be it in Lebanon or Syria, the attack on Doha in particular in September last year. Saudi Arabia since then has really recalibrated or has, it thinks differently about security in the region where the sources of threats and risks are with Israel, you know, sitting alongside potentially Iran as to where those threats lie. And since then, Saudi Arabia has really adopted a very different approach and how it seeks to uphold its security. We've seen it really broad in its regional partnerships, deep in its defense agreements with different partners. The recently declared Mecca agreement with Turkey and Pakistan, these are two states

whose relationship with Israel are not necessarily good either. So it wouldn't necessarily be pushed into making a deal here out of necessity? No, not necessarily at all. This is a country that has diverse and deep defense and security partnerships across the region. And so Israel is not the only state that is sort of available for that sort of relationship. It's not going to go down the UAE path in terms of doubling down on ties with Israel. Rwan, let's switch to looking at another thing lawmakers will likely be considering, which is whether or not the Saudis receiving nuclear fuel-making technology is then in turn going to encourage other countries in the region to want to go nuclear. Have we seen any evidence of that? Look, I think the point about this deal is that

Saudi is not going to be subject, at least to my understanding, to IAEA monitoring under their additional protocol, and it leaves open the prospects of domestic enrichment. But there are two confidential sign letters that have been signed. And if we take, sort of what the energy secretary has said at face value, he did say that the agreement does uphold the highest standards of nuclear safety and non-proliferation. So I think that at this point, without further details or information available, I would be hesitant to say that this is going to pose a risk as such. Now, we've seen other countries in the region that are interested in nuclear energy. The UAE has proceeded with its own nuclear power plant and Egypt is currently constructing its own nuclear power plants.

But neither are proceeding with domestic enrichment. And we haven't had any indications that states are looking towards that, at least not as of yet. That was Ruan Maya, a senior analyst for the Middle East and North Africa at Oxford Analytica, which is a part of Dow Jones, the publisher of the Wall Street Journal. Rwant, thanks so much. Thank you. Canada is truly Trump country. That's South Carolina Senator Darlene Graham after winning a GOP runoff for her late brother Lindsay's seat last night.

Graham, who was endorsed by the president, narrowly managed to hold off a challenge from Republican representative, Raoul. Norman. Graham will now face Democrat Annie Andrews, a pediatrician and gun safety advocate in November's general election. South Carolina hasn't elected the Democratic Senator since 1998. Well, in another sign of the power of the president's endorsement businessman Mike Masey won a separate Republican runoff last night as he hopes to become Oklahoma's next governor. Trump, in recent days, dialed up attacks on Macy's opponent, state attorney general Gentner Drummond, calling him a fake Republican and joining a telephone rally that Macy heard here, courtesy of the Oklahoman, said it helped to push him over the finish line.

He had 38,000 Republicans on the line yesterday with me. Many of you enjoyed that. Primary season is now starting to cool off with only Massachusetts voting next Tuesday, followed by New Hampshire and Rhode Island on September 8th and 9th. Deloitte has agreed to pay around $21 million to settle allegations that it defrauded the federal government by continuing to consider diversity in its hiring, promotion, and staffing decisions. It is latest settlement stemming from investigations that the Trump administration launched last year. The Justice Department has been arguing that federal contractors that consider DEI and their employment practices are committing fraud because government contracts require companies to promise they won't discriminate based on race-chance. or background. In a statement, Associate Attorney General Stanley Woodward said that the deal was another example of how the department was, quote, eliminating woke unconstitutional practices from American workplaces. Deloitte said it was pleased to have resolved the matter, quote,

to avoid the cost and distraction of protracted litigation. Coming up, investors are on edge, ahead of NVIDIA's earnings later today, and another top executive leaves OpenAI. Those stories and more after the break. In markets news, investors are waiting with bated breath for invidia chief executive Jensen Huang to step up to the mic for the company's earnings call after today's closing bell. Well, this isn't just a tech story. At this point, it's increasingly a financial story. That's journal reporter David Uberti, who spoke to our tech news briefing podcast. After 14 straight quarters of profit beats, David says the $5 trillion chipmaker is facing sky high expectations. The current projection is annual earnings growth of 95% this quarter.

So all they have to do in order to beat expectations is post $51.5 billion worth of net income, which for any other company in the stock market would just be insane to think about. But the funny thing about Nvidia is that traders typically sell off Nvidia, even after it beats earnings expectations. So in at least the last four quarters, Nvidia's stock has fallen after it reports these sort of blockbts. buster profits. So it's not just that NVIDIA has to beat expectations. It also kind of has to beat the whisper number. At the same time, mounting public pushback to AI, rising debt amongst hyperscalers, and concerns around AI revenue streams, investors will be scrutinizing NVIDIA's recent investments and its $500 billion financing deal with Wall Street firms.

I think there will be a lot of questions about this growing web of financial schemes. Nvidia has sort of thrown into the marketplace. There are a lot of unanswered questions from both Nvidia itself, as well as some of these Wall Street firms that it's partnering with. Who is actually going to get its money? How much will Nvidia be on the hook for if some of those loans turn out to be bad? And the sort of underlying question there is if Nvidia has to invest in order to create demand, where does that leave the market as far as what the actual demand is?

and will it be able to continue growing if Nvidia itself can't throw money at some of its potential customers? Meanwhile, billionaire Bill Gates has issued a stark warning about the risks that AI poses to employment, global security, and human relationships. In a 12-page essay published on his website, Gates argued that leaders are failing to prepare for the disruption while companies are barreling ahead with the technology with no plan for the upheaval little cause. He urged governments globally to collaborate on regulation, specifically between the U.S. and China, and also called for taxes on AI tokens and bots, which he argued could delay companies rush away from human labor and fund a social safety net

for retraining people whose jobs won't exist. Gates said he'd bring those concerns directly to Washington in order to advocate for stronger safeguards before, quote, public trust has eroded. Another top executive is leaving OpenAI ahead of the company's potential IPO next year. Chris Malone took over as OpenAI's head of data centers in early 2025 after the company announced its ambitious Stargate project to build data centers with Oracle and SoftBank. In addition to stumbles at Stargate, OpenAI has since shifted towards signing deals with cloud providers rather than developing facilities itself. In recent weeks, OpenAI's chief revenue officer, chief operating officer, and Sam Altman's second-in-command, Fiji Simo, have all left the company. We've talked here before about Tesla's humanoid robot ambitions, which Elon Musk has told investors could print infinite revenue for the company,

while Chinese EV maker X-Pung is making its own humanoid bet, with co-founder Brian Gou predicting that the margins of its robotics unit will one day eclipse its core vehicles business. The hardware is already much higher than the automotive business. In addition to that, we think there will be significant opportunities to add on future AI model, training, upgrade, software capability, related revenues, which is much higher margin as well. Earlier this week, Ex-Pung's robotics unit raised more than $900 million,

which had said was a record single-round private capital raise in China's so-called embodied AI industry. And that's it for what's news for this Wednesday morning. Today's show was produced by Hattie Moyer and Daniel Bach. Our supervising producer is Sandra Kilhoff, and I'm Luke Vargas for the Wall Street. journal. We will be back tonight with a new show. And until then, thanks for listening.