Nvidia Stock Rallies on US-Saudi AI Alliance

Nvidia shares surged 5.6% on Tuesday after the announcement of a major US-Saudi artificial intelligence investment initiative led by President Trump and Crown Prince Mohammed bin Salman. 

Despite this rally, Nvidia’s stock remained 4.5% lower year-to-date as of the 13 May close, pressured by US-China trade tensions and competition from China’s new DeepSeek AI model. 

The boost came as part of a broader $600 billion Saudi investment package into the US, including $80 billion earmarked for transformative technologies across sectors like AI, defense, energy, and aerospace.

Nvidia’s role in the deal is significant, with plans to deliver 18,000 units of its GB200 Grace Blackwell AI supercomputers to HUMAIN, a Saudi Public Investment Fund subsidiary, and additional projects with SDAIA and Aramco Digital to build AI factories and smart city infrastructure. 

Saudi Arabia is actively looking to diversify its oil-dependent economy, and has set a goal of attracting $100 billion in annual foreign direct investment under its Vision 2030 plan, with AI emerging as a big focus.

What Does This Mean for Me?

The Trump administration’s move to scrap the AI diffusion rule, which had restricted exports of advanced chips under President Biden, further fueled optimism among US chipmakers. 

Talks are now taking place to potentially supply over one million Nvidia chips to the UAE, far beyond previous export limits. As the Trump administration signals a more aggressive AI export strategy, big tech players like AMD, Amazon, Cisco, and OpenAI are also beefing up investments in Saudi Arabia, setting up US firms to dominate the next phase of global AI expansion.