Last week, following a historic visit to Saudi Arabia, President Donald Trump announced a significant investment pledge from the kingdom, amounting to $600 billion in various deals with U.S. companies. This agreement notably includes $142 billion in defense sales aimed at providing Saudi Arabia with “state-of-the-art warfighting equipment.”
The primary beneficiaries of this partnership are U.S. semiconductor giants Nvidia (NVDA 0.28%) and Advanced Micro Devices (AMD 1.91%). Shortly after the announcement, both companies disclosed agreements to supply chips to Humain, a Saudi Arabian artificial intelligence (AI) start-up backed by the kingdom’s public investment fund.
Image source: Getty Images.
Massive AI Investments Transforming Saudi Arabia
Nvidia is set to provide Humain with several hundred thousand advanced graphics processing units (GPUs) over the next five years. This supply will underpin the AI data centers that Humain plans to construct in Saudi Arabia. The initial shipment will include 18,000 of the cutting-edge GB300 Grace Blackwell AI supercomputer chips, as well as essential InfiniBand networking equipment.
Additionally, the Saudi Data & AI Authority (SDAIA) will implement up to 5,000 Blackwell GPUs to facilitate smart city solutions. Nvidia is not only supplying hardware but is also set to train thousands of local developers and deploy the first Omniverse Cloud in the country to simulate and test AI solutions.
Financial Impact and Revenue Surge
Bank of America analysts project that the Nvidia-Humain deal could be valued between $15 billion and $20 billion, translating to annual sales of approximately $3 billion to $5 billion. This financial influx will be pivotal, especially as the U.S. nears a decision to ease chip export restrictions to the United Arab Emirates, which may allow the import of 500,000 advanced AI chips annually through 2027.
These strategic deals are crucial, particularly in light of Nvidia’s diminished revenue from China, which contributed around $17 billion last fiscal year. With the tightening of U.S. export controls, Nvidia’s data center revenue from China has drastically decreased to mid-single digits, amounting to roughly $7 billion annually based on Q4 run rates.
AMD’s Strategic Partnerships and Revenue Recovery
Meanwhile, AMD has secured a $10 billion deal with Humain to supply chips over five years, encompassing its entire AI compute portfolio, including both GPUs and central processing units (CPUs). AMD has also partnered with SDAIA to assess the use of its chips in future AI data centers. Following new Chinese export regulations, AMD anticipated a revenue loss of $700 million in Q2 alone but expects the Humain deal to offset much of this reduction, equating to $2 billion annually.
Future Growth: AI Investments on a Global Scale
Beyond these recent agreements, the focus on AI infrastructure initiatives signals a significant growth opportunity for U.S. chipmakers. Gulf countries like Saudi Arabia and the UAE are not alone in this pursuit; Kuwait is collaborating with Microsoft to emerge as a regional AI hub, with additional investments from Bahrain and Qatar for AI infrastructure development.
Globally, nations like India are entering into partnerships with leading cloud computing firms to bolster their AI capabilities. Even smaller countries, such as Singapore, are committing resources toward AI initiatives, illustrating a full-scale shift toward sovereign AI investments.
Investment Prospects for Nvidia and AMD
Considering the ongoing AI infrastructure projects, both Nvidia and AMD are well-positioned for growth. Nvidia leads the GPU market with over 80% market share, benefiting significantly from rising data center expenditures. Conversely, AMD has established itself as a key provider of CPUs for data centers and is carving out a notable presence in the AI inference GPU market.
With both companies trading at an appealing forward price-to-earnings ratio of around 30, they represent attractive investment opportunities in a landscape ripe for growth. Thus, investing in Nvidia and AMD may yield favorable returns as both companies tap into expanding AI markets.
Bank of America is an advertising partner of Motley Fool Money. Geoffrey Seiler holds no positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Bank of America, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
U.S.-Saudi Investment: A Boon for Tech Giants
Last week, a significant announcement emerged following a high-level visit to Saudi Arabia. The kingdom has committed to a massive $600 billion investment in partnerships with American companies, with a notable allocation of $142 billion earmarked specifically for defense purchases. This investment aims to enhance Saudi Arabia’s military capabilities, focusing on deploying advanced warfighting technologies.
Tech Sector Beneficiaries
Among the biggest beneficiaries of this investment are prominent American chip manufacturers, Nvidia and Advanced Micro Devices (AMD). Following the announcement, both companies disclosed agreements to supply cutting-edge chips to Humain, a Saudi AI startup backed by the kingdom’s public investment fund.
Image source: Getty Images.
Nvidia’s Commitment to AI Infrastructure
Nvidia has stepped up to deliver hundreds of thousands of its advanced graphics processing units (GPUs) over the next five years for Humain’s AI data centers in Saudi Arabia. This includes an initial shipment of 18,000 GB300 Grace Blackwell AI supercomputer chips, alongside InfiniBand networking equipment to bolster connectivity.
Support for Smart City Initiatives
The Saudi Data & AI Authority (SDAIA) has outlined plans to implement up to 5,000 Blackwell GPUs to support smart city initiatives. Additionally, Nvidia intends to train thousands of local developers and introduce the country’s first Omniverse Cloud to facilitate simulations of AI solutions.
Financial Impact and Future Outlook
Bank of America analysts project that the deal could generate between $15 billion to $20 billion in total spending throughout its duration, translating to approximately $3 billion to $5 billion in yearly sales for Nvidia. Concurrently, reports indicate that the U.S. might ease chip export restrictions for the UAE, allowing for significant imports of advanced AI chips, further complementing these developments.
AMD’s Strategic Deal
In a parallel agreement, AMD announced a substantial $10 billion deal with Humain to supply a comprehensive range of its AI computing technology, including both GPUs and CPUs. This partnership is particularly crucial for AMD, especially after facing potential revenue losses from new Chinese export restrictions.
The Growing AI Investment Landscape
These developments highlight a significant trend in global investment in AI infrastructure, particularly in the Middle East. Countries like Kuwait, Bahrain, and Qatar are making similar strides, focusing on building robust AI ecosystems. Internationally, nations such as India and Singapore are also ramping up their AI capabilities, signaling a widespread commitment to technological advancement.
Investment Considerations
For investors, both Nvidia and AMD present compelling opportunities amid rising AI infrastructure spending. Nvidia holds a dominant position in the GPU market, while AMD is successfully carving out a niche in CPU supply for data centers. With both companies trading at around a 30 times forward price-to-earnings ratio and significant growth potential ahead, they may prove to be attractive investment options in the evolving tech landscape.
Bank of America is an advertising partner of this publication. The author does not hold positions in any mentioned stocks. The publication has positions in and recommends AMD and Nvidia. Please refer to our disclosure policy for further details.
