US-Saudi Deals
May 13, 2025 – During President Donald Trump’s Middle East trip, the United States is finalizing significant agreements with Saudi Arabia to enhance the kingdom’s access to advanced AI chips and establish a new mineral export partnership. These deals, announced in Riyadh, aim to position Saudi Arabia as a global AI hub while securing critical resources for the US, according to reports from Bloomberg, The Washington Post, and discussions on X. The agreements reflect a strategic pivot in US-Saudi relations, prioritizing technology and innovation over traditional oil and security ties, but raise concerns about national security and technology diversion to China.
AI Chip Deal: Powering Saudi Arabia’s AI Ambitions
The centerpiece of the US-Saudi agreements is a deal granting Saudi Arabia’s newly formed AI company, Humain, access to tens of thousands of advanced semiconductors from Nvidia and AMD, as reported by Bloomberg and confirmed by Nvidia CEO Jensen Huang at the Saudi-US Investment Forum. Specifically, Nvidia will supply 18,000 of its cutting-edge Blackwell chips to power a 500-megawatt data center, a cornerstone of Saudi Arabia’s AI infrastructure. AMD will also provide chips, with Humain committing $10 billion to the project, according to AMD’s statement. The deal, potentially announced this week during Trump’s visit, aims to bolster Saudi Arabia’s capacity to train and deploy advanced AI models, such as the bilingual Arabic-English Allam model developed by the Saudi government.
The agreement includes a partnership with US tech firm Global AI, valued at billions, to collaborate with Humain on data center development in New York and Saudi Arabia. This follows a $1.5 billion commitment from Saudi Arabia to US AI chip startup Groq in February 2025, which is expanding a data center in Dammam to support Allam and other AI technologies. The Trump administration is easing Biden-era export controls, which restricted AI chip sales to Saudi Arabia (a Tier 2 country under the AI Diffusion Rule) due to concerns about technology leakage to China. To address these risks, the US is negotiating provisions to control access to data centers using American chips, potentially through “data embassies” exempt from local data-protection laws, as noted in a draft Saudi law cited by Bloomberg.
Mineral Export Agreement: Securing Critical Resources
In parallel, the Trump administration has approved a $9 billion memorandum of understanding between US firm Burkhan World Investments and Saudi partners to mine and process critical minerals, including lithium, cobalt, and rare-earth elements, for export to the US. The deal, reported by The Washington Post, involves Grand Mines Mining LLC, a Saudi company that will prospect for these minerals in Saudi Arabia and Africa. These resources are vital for advanced manufacturing, energy, and defense applications, including AI hardware and battery production. The agreement aligns with Saudi Arabia’s Vision 2030 goal to diversify its economy beyond oil and strengthens US supply chains amid global competition for critical minerals.
Analysis: Strategic, Economic, and Security Implications
Strategic Alignment with Vision 2030
The AI chip and mineral deals are pivotal to Saudi Arabia’s Vision 2030, which seeks to transform the kingdom into a global technology and economic powerhouse. The Saudi Data and Artificial Intelligence Authority (SDAIA) aims to position Saudi Arabia among the top AI nations by 2030, with $14.9 billion in AI investments announced at the LEAP 2025 conference, including the Groq deal. The AI chip agreement with Nvidia and AMD enhances Saudi Arabia’s ability to develop local AI models like Allam, fostering innovation and creating thousands of tech jobs. The mineral deal supports economic diversification by leveraging Saudi Arabia’s energy surplus and strategic location to become a hub for critical resource exports. These efforts align with US interests in countering China’s Digital Silk Road and securing reliable supply chains.
Economic Benefits and Market Dynamics
For the US, the deals provide significant market access for chipmakers like Nvidia and AMD, whose stocks rose 3.6% and 4%, respectively, on May 13, 2025, following the announcement. The partnerships also attract Saudi investments in US tech infrastructure, such as Global AI’s New York data center. For Saudi Arabia, the influx of AI chips and expertise supports its ambition to become a regional AI leader, potentially inspiring similar deals in Gulf states like the UAE, Bahrain, and Qatar. A World Bank study estimates that a 20% annual increase in Saudi Arabia’s AI market could boost GDP growth by 0.6% by 2030, with a net job creation of 2.5% despite automation risks. However, the high cost of AI infrastructure and reliance on US technology may strain Saudi Arabia’s financial resources and create dependency.
Security Concerns: China and Technology Diversion
A key concern is the potential for US AI chips to be diverted to China, either through physical shipments or cloud access, as highlighted by Bloomberg and X posts. The Biden administration’s AI Diffusion Rule, implemented in January 2025, restricted chip exports to Tier 2 countries like Saudi Arabia to prevent such risks. The Trump administration’s shift to a global licensing regime with government-to-government agreements aims to balance security and trade, but critics argue it may be too permissive. Analyst Winter-Levy, cited in The Washington Post, called the deal a “giveaway” of strategic technology for short-term concessions. Proposed safeguards, such as US-controlled data center access and “data embassies,” aim to mitigate risks, but their effectiveness remains untested. Saudi Arabia’s past ties to China, including a $7 billion currency swap and Aramco’s energy investments, heighten US scrutiny, as seen in the 2023 forced divestment of Saudi fund Prosperity7 from Rain AI.
Geopolitical Implications
The deals mark a shift from Biden’s restrictive export policies to Trump’s more open approach, reflecting his business ties in the Gulf and Saudi Arabia’s $20 billion AI investment pledge in the US, as noted on X. This aligns with Trump’s broader strategy to use AI chips as a bargaining tool, as seen in parallel UAE negotiations with G42 and OpenAI. However, the Middle East Institute warns that without robust bilateral agreements, similar to the 2024 G42-Microsoft deal, the US risks losing strategic leverage. The deals strengthen US-Saudi ties but may complicate relations with allies like the Netherlands, where ASML faces export curbs to China, impacting global chip supply chains. The agreements could also set a precedent for digital cooperation across the Global South, but only if security concerns are adequately addressed.
Conclusion
The US-Saudi AI chip and mineral deals represent a bold step toward deepening technological and economic ties, positioning Saudi Arabia as an AI hub and securing critical resources for the US. However, the agreements face challenges, including security risks, economic dependencies, and geopolitical complexities. As Trump’s Middle East trip continues, with a UAE visit planned for May 16, further details may emerge on similar deals, such as the G42 chip agreement. For updates, follow discussions on X or visit Bloomberg and The Washington Post.
