US Plans to Grant Saudi Arabia More Access to AI Chips | Bloomberg Technology
INTEREST." ♪ >> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE, IN SILICON VALLEY AND BEYOND, THIS IS "BLOOMBERG TECHNOLOGY" WITH CAROLINE HYDE AND ED LUDLOW. >> LIVE FROM NEW YORK AND SAN FRANCISCO, THIS IS BLOOMBERG TECHNOLOGY. ALL EYES ON SAUDI ARABIA AS TEXT GOES MEET WITH ACID AND TRUMP AND SAUDI ARABIA'S CROWN PRINCE.
>> THE TRUMP ADMINISTRATION PREPARING TO ANNOUNCE A DEAL THAT WOULD GRANT SAUDI ARABIA MORE ACCESS TO ADVANCED SEMI CONDUCTOR THERE'S. CAROLINE: APPLE PLANNING TO IMPROVE IPHONE BATTERY LIFE WITH AI. DETAILS LATER THIS HOUR. WE CHECK IN ON THE MARKETS. I BRING YOU YEAR TO DATE. WE REENTER A BULL MARKET AND NOW WE PUSH HIGHER FOR YEAR TO DATE JUST TO SHOW YOU. WE BREAK BACK EVEN WITH THE MAGNIFICENT SEVEN LEADING THE CHARGE HIGHER. ED: NVIDIA HAS SURGED IN THE LAST 30 MINUTES OR SO.
SMALL AND HYPERSCALER TERMS, BUT SIGNIFICANT BECAUSE OF ACCESS TO TECHNOLOGY FOR THAT NATION. AMD ALSO HAS ITS OWN AD HOC AGREEMENT GOING ON WITH THE STATE. THIS IS IMPORTANT AND IT IS THE MONEY DRIVING TECH RIGHT NOW COMING OUT OF SAUDI ARABIA.
IT IS ALSO THE POLITICS AS WELL. CAROLINE: LET'S GET THE CONTEXT. WE ARE JOINED LIVE FROM SAUDI ARABIA. WE HAVE JUST HEARD FROM ELON MUSK ON STAGE, ANTICIPATING THE U.S. PRESIDENT TO BE THERE WITH THE CROWN PRINCE. GIVE US THE CONTEXT OF WHAT IS
HAPPENING RIGHT NOW. >> ELON MUSK MUST HAVE KNOWN BLOOMBERG TECHNOLOGY WAS COMING UP. ONE OF THE LARGEST DEFENSE DEALS EVER ANNOUNCED IN HISTORY. THE HEADLINE FIGURE, 600 BILLION DOLLARS INVESTED IN THE U.S. OVER THE COMING YEARS. OF NOTE, THIS IS THE AI INVESTMENT VEHICLE THAT THE CONFERENCE ANNOUNCED WAS BEING LAUNCHED YESTERDAY IN ANTICIPATION OF TODAY. IT WAS ONLY AN AHEAD OF
PRESIDENT TRUMP'S VISIT. THEY ARE SAYING THAT WITH THIS VENTURE, THEY WILL BE BUILDING AI FACTORIES ACROSS THE KINGDOM OF SAUDI ARABIA AND USING UP TO 18,000 NVIDIA GRACE BLACKWELL CHIPS. I SHOULD HAVE MENTIONED THAT JASON WONG WAS WALKING AROUND HERE EARLIER SO WE GOT A GLIMPSE OF THE BIG ANNOUNCEMENT THAT WAS TO COME. THIS TIES BACK TO ANOTHER ANNOUNCEMENT IN THE RUN-UP TO THE TRIP, THAT THE TRUMP ADMINISTRATION ARE RESCINDING THOSE BIDEN INSTITUTED DIFFUSION RULES SET TO COME INTO PLACE.
WE HEARD FROM DAVID SACHS EARLIER AND HE SAID THOSE RULES WERE TOO BUREAUCRATIC AND THERE ARE SMARTER WAYS TO ENSURE THAT THESE CHIPS DON'T GET INTO THE WRONG HANDS, WHICH IS WHY THEY ARE RESCINDING THAT AND COMING OUT WITH THESE BILATERAL AGREEMENTS. THIS BIG ONE WITH NVIDIA AND HUMANE. ED: THERE ARE STILL SOME CONFIRMATIONS TO COME. THAT WAS THOUGHT THAT PRESIDENT TRUMP WOULD DO A DEAL WITH SAUDI ARABIA. NVIDIA WAS ALREADY DOING IT. WE WILL HEAR FROM PRESIDENT TRUMP AND CROWN PRINCE MOHAMMAD BIN SALMAN IN LATER IN RIYADH. SET THE SCENE AND WHAT DETAILS
ARE WE LOOKING OUT FOR? ABSOLUTELY, THEY SHOULD BE MAKING THEIR WAY HERE IN THE NEXT 10-15 MINUTES WALKING ONE OF THE STAGE BEHIND ME. YOU WILL SEE THAT IT IS MANY AMERICAN CEOS ALONGSIDE SAUDI OFFICIALS. SO MANY OF THESE DEALS HAVE BEEN SIGNED. THEY ARE LOOKING TO EXPAND REFINERIES. THERE IS A PLAN TO BUILD IN THE UNITED STATES AS WELL.
AN AIRLINE LEASING COMPANY HAS COMMITTED TO BUYING $4.8 BILLION , SO THAT HAS BEEN A BIG FOCUS OF DOHA COMING IN DAYS. DEFENSE AGREEMENT SECURED BETWEEN THE GEOPOLITICAL AGREEMENTS AS WELL. THEY HAVE BEEN TRYING TO GET THIS DEFENSE AGREEMENT ACROSS THE LINE. WE HAVEN'T EVEN TALKED ABOUT THE GEOPOLITICAL IMPORTANCE IN THE RUN-UP TO THESE NEXT FEW DAYS. WE ARE GOING TO HEAR MORE FROM THE PRESIDENT AND THE CROWN PRINCE SHORTLY.
ED: THE PRESIDENT WAS HOPING TO ADVANCE ACCESS TO SAUDI ARABIA'S ACCESS TO CHIPS. MIKE SHEPPARD JOINS US NOW. IT IS DIFFICULT BECAUSE NVIDIA'S INVESTMENTS WILL GO INTO SERVER DESIGNS TO A DATA CENTER WHICH IS IN HUGE IN THE SCHEME OF HYPERSCALER DATA CENTERS. WHERE DO WE KNOW WHERE THE BILATERAL STANDS BETWEEN THE TWO NATIONS? MIKE: WE ARE EXPECTING THIS ANNOUNCEMENT DURING THE PRESIDENT'S VISIT TO THE KINGDOM AND THE IDEA WOULD BE TO BRAND SAUDI ARABIA -- GRANT SAUDI ARABIA MUCH MORE ACCESS WITH YOU WERE FETTERS AND OBSTACLES IN THE WAY TO GAINING ACCESS TO THOSE KIND OF CHIPS YOU TALKED ABOUT FROM NVIDIA AND AMD NEEDED TO POWER THE KINGDOMS AI AMBITIONS. THAT DATA CENTER THAT YOU JUST
ALLUDED TO THE TRUMP ADMINISTRATION IS MOVING AWAY FROM BIDEN ERA RULES THAT SET THESE THREE BROAD CATEGORIES. THEY ARE TRYING TO SET UP THESE BILATERAL ACCORDS BASED ON NEEDS OR RELATIONSHIPS. HOW DO YOU KEEP CHINA FROM EXPLOITING THOSE RELATIONSHIPS AND SOMEHOW GAINING ACCESS? THAT WILL BE ONE OF THE TRICKS IN ALL OF THESE INDIVIDUAL DEALS. THE U.S. WILL BE INSISTING ON SECURITY PROVISIONS AND THERE ARE SIMILAR DISCUSSIONS ABOUT TO TAKE PLACE WITH THE UNITED ARAB EMIRATES.
THAT MAY GRANT THEM ACCESS. THE GOAL NATION LIKE SO MANY OTHERS ARE SEEKING ACCESS TO THESE CHIPS AND THEY ARE IMPLORING THE TRUMP ADMINISTRATION TO TAKE STEPS TO MAKE IT EASIER. CAROLINE: WE WILL GET ONTO THE UAE IN A MOMENT, SOME BREAKING NEWS THAT PRESIDENT TRUMP IS SET TO MEET THE SYRIAN RESIDENT IN SAUDI ARABIA. THIS IS A BROAD GEOPOLITICAL CONVERSATION WE HAVE. WE ARE SEEING A RESTRICTION ON CHINA'S ACCESS. MICHAEL: THIS IS DONALD TRUMP'S FIRST TRIP ABROAD SINCE WINNING REELECTION.
OTHER NATIONS WILL BE LOOKING TO HOW THE UAE AND THE SAUDI GOVERNMENT ARRANGE AN UNDERSTANDING. HOW THEY REACH AN UNDERSTANDING WITH TRUMP ON GAINING ACCESS TO NVIDIA TECHNOLOGY. EVERY COUNTRY WANTS MORE OF IT TO EXPAND THEIR AI CAPABILITIES AND RIGHT NOW NVIDIA AND AMD ARE THE BIGGEST NAMES, REALLY THE ONLY GAME IN TOWN. ED: IT SHOWS US THAT THE TRUMP ADMINISTRATION IS MORE WILLING THAN THE BIDEN ADMINISTRATION TO ALLOW THE MOVEMENT OF U.S. TECHNOLOGY TO THE GULF REGION.
MICHAEL: THAT'S RIGHT. HIS AI ADVISOR DAVID SACHS HAS REFLECTED THAT PUBLICLY WHERE HE HAS SAID THIS AI DIFFUSION RULE FROM THE BIDEN TEAM, MAYBE IT WAS WELL SPIRITED TO KEEP CHINA FROM GAINING ACCESS TO U.S. TECHNOLOGY, BUT IT WAS INFLEXIBLE AND HARD TO WORK WITH AND WILL IMPEDE HIS ABILITY TO EXPORT AMERICAN TECHNOLOGY ABROAD.
HE WANTED TO MAKE SURE THE TECHNOLOGY DIDN'T JUST A WITHIN THE BORDERS. THE WAY THEY SEE DOING THIS IS SHARING IT WITH U.S. ALLIES WHO ARE TRUSTED. CAROLINE: WE DO HAVE PICTURES OF PRESIDENT TRUMP ARRIVING AT THIS EVENT WITH CROWN PRINCE MOHAMMAD BIN SALMAN IN OR MBS AS HE IS KNOWN MORE BROADLY. THIS IS ALL AT THE SAUDI INVESTMENT FORUM. WE ARE SEEING PLENTY OF U.S.
EXECUTIVES TAKE TO THE STAGE. WE ARE ABOUT TO HEAR FROM THE PRESIDENT AND THE CROWN PRINCE THEMSELVES. AS WE SEE THE LIVE PICTURES OF THE ARRIVALS OF THE DIGNITARIES AT THE MOMENT, WHAT ELSE ARE WE REPAIRING FOR IN THE BREATH, WHETHER TECHNOLOGY OR DEFENSE. PRESIDENT TRUMP WANTS TO SEE BILLIONS EXCHANGED FOR. MICHAEL: THIS TRIP IS ABOUT DEALS, DEALS, DEALS. WHILE GEOPOLITICS PLAY A ROLE
IN THE CONVERSATION PRESIDENT TRUMP WILL BE HAVING, IT IS ABOUT BRINGING INVESTMENT TO THE U.S., THIS HAS BEEN WHAT IT IS ALL ABOUT. WE SAW THE SOFTBANK DEAL AND OTHERS. HE WANTS TO BE ABLE TO TOUT AN POINT TO THIS AS HIS ECONOMIC ACCOMPLISHMENT THROUGH TARIFFS THAT WOULD PRESSURE COMPANIES AND OTHER COUNTRIES TO SEND MORE BUSINESS TO THE U.S. BUT ALSO TO ENSURE THAT THERE
IS AN AMERICAN STAMP ON ALL OF THIS TECHNOLOGY. ED: MICHAEL SHEPARD STANDING BY FOR US. AS WE SEE THE PRESIDENT OF THE UNITED STATES GATHER WITH THE CROWN PRINCE OVER IN RIYADH, WE ARE GOING TO TAKE YOU TO THE MARKET REACTION RIGHT NOW. OUR SENIOR ANALYST IS STANDING BY. TODAY, WE DO HAVE A RISK ON ATTITUDE.
DEALS UNFOLDED, BUT ALSO THE CHINA-U.S. COMBING IN TERMS OF THE RATCHETING UP OF TARIFFS. WHAT DO YOU THINK ABOUT BUYING INTO THESE NAMES RIGHT NOW. >> WE ARE GETTING A SENSE THAT THE MOOD MUSIC HAS CHANGED QUITE CONSIDERABLY AS WE MOVE INTO TUESDAY. WE HAD THAT STRONG RALLY IN THE NASDAQ 100 YESTERDAY UP AROUND 4.3%. SEEING THOSE GAINS EXTENDED
TODAY UP AROUND 1.4%. THE MOOD IS DEFINITELY UPBEAT AND IT DOES FEEL THAT THE SENTIMENT IS CHANGING AND THAT THE OUTLOOK IS MORE POSITIVE. WE ARE PAST THE WORST CASE SCENARIO. WE SEEM TO BE LOOKING AT A MORE POSITIVE, UPBEAT OUTLOOK. I WOULD LIKE TO SAY I DON'T
THINK WE ARE QUITE OUT OF THE WOODS YET. I THINK THERE ARE STILL POTENTIAL TARIFF ISSUES THAT HAVE NOT BEEN RESOLVED PARTICULARLY AROUND ELECTRONICS AND SEMI CONDUCTORS THAT WE HAVE HEARD THE WHITE HOUSE SAY THEY ARE LOOKING AT. AS FAR AS THE DE-ESCALATION. AS PART AS THE PUSH FOR DEALS.
ED: THE PRESIDENT STANDING NEXT TO MBS, BUT ALSO SAUDI ARABIA'S INVESTMENT MINISTER AND THE HEAD OF THE PUBLIC INVESTMENT FUND. IF THESE TEXT DEALS ARE SUBSTANTIVE, HOW DO YOU DO THAT AS AN INVESTOR? DO YOU INVEST IN A U.S. PROXY THAT IS SET TO BENEFIT OR IS SAUDI ACCESSIBLE TO YOUR CLIENTS? >> IT WOULD BE THROUGH THE U.S. PROXY. THAT IS WHAT IS MOST EASILY ACCESSIBLE.
THAT IS WHAT WE NEED TO FOCUS ON. THOSE ARE THE AREAS THAT ARE CONTINUING TO PUSH HIGHER TODAY. ED: NVIDIA IS UP MORE THAN 5%. HOW BIG A DEAL IS THIS FOR THEM >> WHAT IT MEANS FOR THE FUTURE, WE KNOW SAUDI ARABIA IS VERY FOCUSED ON LOOKING TOWARD AI AND TECHNOLOGICAL FUTURE. THIS COULD BE MUCH BIGGER THAN WHAT IT APPEARS TO BE TODAY.
TODAY IS DEFINITELY IN MOVE IN THE RIGHT DIRECTION. IT IS ENCOURAGING AND WE CAN SEE THAT FROM THE REACTION IN THE SHARE PRICE. WHAT THIS MEANS FOR THE FUTURE GOING FORWARD IS ALMOST JUST AS IMPORTANT. CAROLINE: WHAT HAS BEEN SO HAMPERING THE WILLINGNESS TO BUY BACK INTO GENERATIVE AI OR THESE AI INFRASTRUCTURE PLAYS IN PARTICULAR. A LACK OF CLARITY INTO WHAT THE
AI DIFFUSION RULE. NOW IT BECOMES EMBROILED IN THE OVERALL TARIFF CONVERSATION, IS THAT IT POSITIVE? WHAT WE HAVE JENSEN HUANG HAVING ACCESS TO CHINA AND SOME WAY? >> POTENTIALLY. WHAT YOU SAY IS TRUE. THERE HAS BEEN MORE CLARITY THAN WHAT THERE WAS.
I DO THINK THERE IS A LEVEL OF UNCERTAINTY, BUT THAT HAS BEEN BROADLY WIPED AWAY. IF WE THINK ABOUT WHAT THAT MEANS, WHAT INVESTORS ARE LOOKING FOR IS SOME SORT OF LIBERTY. AS WE MOVE SLOWLY AND STEADILY TOWARD A CLEARER UNDERSTANDING OF WHAT TRUMP IS LOOKING FOR AND AIMING FOR.
CAROLINE: DOES IT THEN BECOME ALL ABOUT THE 2024 TRADE. DO WE BROADEN IT OUT? HOW MUCH BROADER DO WE GO INTO THE BUYING ATTACK? -- BUYING OF TECH? >> WE HAVE SEEN THE VERY STRONG RALLY. I THINK THIS POTENTIALLY DOES MEAN THAT WE ARE SEEING A REVIVAL OF THAT TRADE BUT THERE IS THE POTENTIAL FOR IT TO BE BROADENED OUT. APPLE HAS BENEFITED GREATLY FROM MORE CLARITY REGARDING THE U.S. AND CHINA. THE OTHER TECH FIRMS AS WELL.
THERE IS THE POTENTIAL FOR THE AI TRADE TO BROADEN OUT. BEFORE WE SAW ALL OF THIS TERROR OF CHAOS HIT TECH STOCKS. THERE IS THE POTENTIAL AS WE GET MORE CLARITY WITH TARIFFS AND WHAT THIS MEANS, WE COULD FIND THE BROADENING OUT OF THE AI TRADE STILL TAKING PLACE IN THE LAST PART OF 2025.
ED: WE ARE STICKING WITH THE IMAGES ON YOUR SCREEN, U.S. PRESIDENT DONALD TRUMP ALONGSIDE SAUDI ARABIA'S CROWN PRINCE. THEY HAVE ARRIVED AT THE SAUDI U.S. INVESTMENT FORUM. THEY ARE TOURING THE VARIOUS BOOTHS. A NUMBER OF CEOS IN ATTENDANCE. INCLUDING JENSEN HUANG.
ELON MUSK HAS BEEN IN ATTENDANCE TALKING ABOUT STARLINK. $600 BILLION OF INVESTMENT A CURED. MIKE SHEPPARD IS THE EDITOR THAT LEADS THE INTERSECTION OF OUR COVERAGE BETWEEN TECH AND POLITICS. MIKE, THE POLITICS PART OF IT IS WHETHER EXPLICITLY WE SEE A BLANKET DEAL BETWEEN THE U.S.
AND SAUDI ARABIA FOR LEAD EDGE SOME CONDUCTORS. MICHAEL: THAT IS WHAT WE ARE LOOKING AT, WHETHER IT IS A BLANKET DEAL FOR A PURCHASE EN MASSE OR A DEAL FOR THE SAUDI'S TO HAVE MORE ACCESS TO CHIPS ON A NEED-BASED BASIS. WE HAVE A NEW AI VENTURE CALLED HUMANE BY THE SAUDI'S, THIS VENTURE WILL BE LOOKING FOR THOSE KIND OF CHIPS IN LARGER AND LARGER NUMBERS. THAT WILL LIKELY BE THE START. TECHNOLOGY IS ONE OF THE AREAS WHERE THEY HAVE CHOSEN TO PLACE THEIR BETS. THEY ARE LOOKING TO GO BEYOND INTO THE OTHER AREAS AND MOVE INTO TECHNOLOGY, HEALTH CARE, AND OTHERS THAT WILL MAKE THEIR ECONOMY DURABLE AND MORE DIVERSE OVER THE YEARS TO COME.
CAROLINE: I MEAN ALL OF THIS IS AS WE SEE MIDDLE EAST MORE BROADLY ANTICIPATING DEALS. WE KNOW THE TRIP IS LONG. QATAR IS GOING TO BE VISITED, THE UAE AS WELL. ARE THEY ALL AFTER THE SAME THING. THE SAME INDUSTRY GROUPS AS
THEY MAKE THIS PARTICULAR TRIP ACROSS? MICHAEL: ABSOLUTELY. THEY ARE GOING TO BE LOOKING AT THE TECH HYPERSCALERS, THE BIG CHIP DESIGNERS, THE MAKERS AND PROVIDERS TO HELP BUILD AND SUSTAIN THE MOMENTUM FOR AI AND OTHER AMBITIONS IN ADVANCED TECHNOLOGIES. THE WAY THEY SEE, DATA CENTERS DO NOT NEED TO ONLY BE LOCATED INSIDE THE CONTINENTAL UNITED STATES. THEY SEE THEIR POSITION IN THE WORLD AS A PLACE OF STRENGTH. THEY SEE THEMSELVES AS HAVING THE ENERGY RESOURCES TO POWER DATA CENTERS AND KEEP THEM RUNNING AND POWER THE AI REVOLUTION NOT JUST IN THE U.S. BUT FROM ANOTHER SPOT HALFWAY AROUND THE WORLD. ED:
GOING BACK TO BASICS, WHAT WE REPORTED WAS CITING SOURCES THAT THE UNITED STATES WANTED TO DO A DEAL WITH THE SAUDI ARABIA AND GOVERNMENT TO BASICALLY HAVE AN AD HOC ARRANGEMENT. WE KIND OF GOT THAT, WHAT AREAS OF THE TECHNOLOGY SECTOR ARE WE HOPING FOR HERE? MICHAEL: THEY ALL SEE OPPORTUNITY IN A REGION SITTING ON VAST WEALTH. INTO OTHER PROJECTS THAT WE MAY BE SEEING.
THEY MAY BE LOOKING TO POWER THE CAPEX WE HAVE BEEN TALKING ABOUT. THEY ARE ALSO LOOKING AT POTENTIALLY CONSUMER MARKET. THE GROWING AND YOUNGER POPULATIONS.
2025-05-16 18:05
