Introduction to the Deal
The US has strengthened its tech ties with the Middle East region through a significant deal between chipmaker Nvidia and Saudi AI startup Humain. Nvidia will provide Humain with 18,000 of its most advanced semiconductors, giving Saudi Arabia a substantial advantage over China in the AI race. According to Wedbush analyst Dan Ives, this deal is a "watershed" moment in global AI, placing Saudi Arabia at the forefront of AI development.
The Partnership
Humain will receive 18,000 cutting-edge Blackwell chips from Nvidia, which are the company’s newest and most powerful chips, introduced only in March. This partnership is part of a broader collaboration between US tech companies and Humain, with AMD, Amazon, and Cisco also signing deals with the Saudi AI startup. The partnership includes a $10 billion collaboration with AMD to provide 500 megawatts of AI compute capacity for Humain’s data centers.
Significance of the Deal
The deal represents a significant step in President Donald Trump’s efforts to court Middle East countries and elevates Nvidia’s role in global AI development. The thousands of semiconductor chips Humain will receive are Nvidia’s most advanced, giving Saudi Arabia a substantial advantage in AI development. Nvidia’s share price has increased by more than 9% since the announcement, demonstrating the significance of this deal.
Impact on the AI Race
The deal gives Saudi Arabia preferential treatment over other countries, besides the US, when it comes to chip deals. According to Dan Ives, this puts Saudi Arabia "to the front of the line" for AI partnerships with the US. The deal also complicates ongoing trade negotiations between China and the US, with China being the "big loser" in this scenario. China has had to settle for Nvidia’s H20 chips, which lack the same firepower as the Blackwell chips.
US-China Trade Relations
The US Department of Commerce has announced the end of the "AI diffusion" rule, a Biden-era policy restricting the export of US-made semiconductor chips. The Trump administration has stated that it will pursue a "bold, inclusive strategy" to share American AI technology with trusted foreign countries while keeping it out of the hands of adversaries. This move has been welcomed by US tech companies, including Nvidia, Microsoft, and Oracle, which had opposed the rule, arguing it stifled global economic growth.
Conclusion
In conclusion, the deal between Nvidia and Humain marks a significant milestone in the AI race, giving Saudi Arabia a substantial advantage over China. The partnership demonstrates the strengthening of tech ties between the US and the Middle East region and elevates Nvidia’s role in global AI development. As the AI race continues to heat up, it will be interesting to see how this deal impacts the global AI landscape and the ongoing trade negotiations between the US and China. With Nvidia’s dominance in the AI revolution, it is clear that the company will play a significant role in shaping the future of AI development.
