Trump’s battle against the cashless agenda begins (from Reagan Gold)
What a day!
Let’s dive into what happened this week that could reshape tech investing for years.
The US just approved sending tens of thousands of its most advanced AI chips to Saudi Arabia and the UAE.
And at the exact same moment, Nvidia dropped earnings that proved the AI boom isn't slowing down.
These two stories aren't separate. They're connected.
Understanding how could help you spot where the money's flowing next.
Jensen Huang & Elon Musk
While the sources don’t detail specific discussions featuring Elon Musk and Jensen Huang, and a 500-megawatt data center project with XAI and Nvidia, we do have crucial insights regarding the high-stakes US-Saudi technology relationship.
"If you go out long enough, assuming there's a continued improvement in AI and robotics, which seems likely, the money will stop being relevant at some point in the future."
During a day of dealmaking, the United States and Saudi Arabia struck a series of agreements that included semiconductors and defense.
A key announcement was an Artificial Intelligence Memorandum of Understanding (MOU).
This MOU likely means the approval of the sale of a package of advanced AI chips to Saudi Arabia.
Saudi Crown Prince Mohammed bin Salman sees computing power as a strategic investment to compensate for the country’s workforce shortages and ensure continued economic growth.
The US-Saudi Arabia Deal
On Tuesday, President Trump rolled out the red carpet for Saudi Crown Prince Mohammed bin Salman. We're talking military flyovers, marching bands, the works.
Trump praised the crown prince in the Oval Office, calling him a "very good friend" while the two countries signed major deals on defense, nuclear power, and—here's what matters for investors—AI.
The bilateral deal is likely to help facilitate permits for AI chip shipments not just to Humain, the people said, but also to US companies with projects in the Gulf nation.
The numbers? The U.S. approved the sale of up to 70,000 advanced AI chips to companies in the United Arab Emirates and Saudi Arabia.
But this isn't just about chips.
Salman said Saudi Arabia is going to invest more than that.
"We are going to increase that $600 billion to almost $1 trillion of investment — real investment and real opportunity."
What Saudis Actually Want
Think about it from their side. Oil won't last forever.
Saudi Arabia needs a new economic engine.
Mohammed bin Salman shared his vision on computing to compensate for the country's workforce shortfalls and ensure continued economic growth.
They want AI factories. Lots of them.
The Saudis get massive compute power—18,000 Nvidia Blackwell GPUs initially, with plans to scale up dramatically.
And they've got something US tech companies desperately need—cheap electricity.
All those data centers running AI need massive amounts of power. Saudi Arabia has energy to spare.
Nvidia Earnings Outlook
The same day those chip deals hit the news, Nvidia reported earnings. The timing couldn't be better for understanding what's really happening.
Nvidia saw EPS of $1.30 on revenue of $57.01 billion. Analysts were anticipating EPS of $1.26 on revenue of $55.2 billion.
But here's the number that matters most:
The AI giant's data center business brought in $51.2 billion vs. estimates of $49.3 billion.
"Blackwell sales are off the charts, and cloud GPUs are sold out. There's been a lot of talk about an AI bubble. From our vantage point, we see something very different."
$NVDA ( ▼ 4.17% ) jumped. Not a little, it popped over 5% after hours. Other chip stocks like $AMD ( ▼ 1.7% ) and Broadcom $AVGO ( ▼ 0.67% ) followed.
The "AI Bubble" Fears
Let's be real. When something goes up this fast, people get nervous.
Is this sustainable? Or are we heading for a crash?
Huang added that the transition from using CPUs to GPUs, AI's ability to generate revenue through ads, and the rise of agentic AI systems that could spark a new wave of apps are all reasons he still sees growth in the coming years.
"There's been a lot of talk about an AI bubble. From our vantage point, we see something very different," Huang said.
The proof? Nvidia told investors to expect $65 billion in revenue next quarter, a number that jumped well past the Street's $61.7 billion range.
That's not the guidance of a company worried about demand drying up.
The China Factor
Here's where it gets complicated.
Why would the US approve sending advanced chips to the Middle East when we've spent years blocking those same chips from reaching China?
While the Trump administration has lifted the Biden administration's "AI Diffusion Rule" that limited the sale of chips to many countries, it still has the final say on exports of the most advanced chips to Saudi Arabia, Tess notes, "likely due to fears related to ties with China."
The concern is real. US national security officials will keep their eyes on "the provisions of the new AI agreement focused on technology protection and what measures will be put in place to keep America's most advanced AI chips out of reach of Chinese adversaries".
Both Saudi Arabia and the UAE have been walking a tightrope—friendly with China, but needing US technology.
Now they're making a choice.
Who Actually Benefits?
Saudi Arabia wins by getting the computing power to build their economy beyond oil. They're betting big on becoming a tech hub.
US chip companies win by securing massive new customers. Saudi Arabia's state-run investment firm's new company, Humain, is slated to receive "several hundred thousand" advanced chips from Nvidia over five years.
The US government wins by keeping these countries buying American instead of Chinese technology. And by collecting new burden-sharing funds from Saudi Arabia to defray US costs.
But there's a catch.
The US has to balance making money with protecting its technology edge. One leak to the wrong country and this whole strategy falls apart.
What This Means
You don't need to buy $NVDA tomorrow. But you should understand the bigger picture.
The AI infrastructure buildout isn't slowing down. It's going global.
Countries want their own AI capabilities, which means more chips, more data centers, more energy infrastructure.
That creates opportunities beyond just chip companies.
Think about power generation, cooling systems, data center construction, cloud computing services.
The rapid construction of data centers across the U.S. has boosted demand for Nvidia's chips. Data center investment, which includes spending on AI research and development, has become the largest contributor to U.S. growth this year.
And now that wave is hitting the Middle East with hundreds of billions in investment behind it.
The Bottom Line
This week showed us something important.
The US and its allies are making a bet that the way to win the AI race isn't by hoarding technology. It's by spreading it strategically to the right partners.
Saudi Arabia gets the tools to modernize. American companies get massive new markets. And the US government gets influence.
But the size of the investments suggests the people with the most information believe AI growth is real, not hype.
Whether that bet pays off?
We'll know in a few years when we see if these Middle Eastern data centers become the powerhouses everyone's predicting—or expensive monuments to tech optimism.
For now, one thing's clear: The AI chip war just went global. And your portfolio might want to pay attention.
