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Nvidia’s stock jumped 5.6% on Tuesday following a massive artificial intelligence (AI) investment deal between the US and Saudi Arabia. The agreement, announced by former President Donald Trump and Saudi Crown Prince Mohammed bin Salman, involves hundreds of billions of dollars. Despite the rise, Nvidia’s shares remain down 4.5% year-to-date amid US-China tensions and competition from China’s DeepSeek. The deal signals a significant push in AI collaboration between the two countries, with Nvidia playing a key role.

US-Saudi AI Deal Overview and Market Impact

During a high-profile investment summit in Saudi Arabia, Trump and bin Salman revealed a $600 billion pledge covering technology, defense, and energy sectors. Nvidia CEO Jensen Huang joined Trump alongside other tech leaders such as Elon Musk and Sam Altman. The deal includes $142 billion in defense sales and $80 billion for new tech initiatives in both countries.

The announcement gave Nvidia’s stock a notable boost, reflecting investor optimism over the company’s role in these projects. Still, broader market pressures keep Nvidia’s year-to-date performance negative, weighed down by geopolitical tensions and growing competition in AI technologies from Chinese firms like DeepSeek.

Saudi Arabia’s Ambitious AI Expansion

Saudi Arabia aims to become a global leader in AI through its Vision 2030 strategy. A core part of this vision involves building extensive AI infrastructure. Nvidia has agreed to supply the Saudi company HUMAIN with 18,000 GB200 AI chips to power data centers designed to handle complex AI workloads.

The Kingdom targets 500 megawatts of AI production capacity and plans to build a sovereign smart city AI platform with the Saudi Data & AI Authority (SDAIA). In addition, Aramco Digital will partner with Nvidia to develop national AI infrastructure, boosting digital services across Saudi Arabia.

Saudi Arabia also hopes to reduce its reliance on oil by attracting $100 billion in annual foreign direct investment, leveraging advanced tech projects to diversify its economy.

Shifts in US AI Export Policy

Alongside the investment announcement, the US Department of Commerce revoked the Biden-era AI export controls set to take effect on May 15. These restrictions had limited AI chip exports to countries including Saudi Arabia and the UAE. The previous rules targeted transfers of critical AI technology to China and other rivals.

The Trump administration now seeks to strengthen AI innovation by promoting partnerships with trusted allies in the Middle East. The Commerce Department emphasized its commitment to block adversaries, especially China, from obtaining key US technologies while easing rules for friendly nations.

This policy change signals a renewed US focus on collaboration with Middle Eastern countries in AI development, fostering an environment for rapid innovation.

Broader Tech Investment in the Middle East

Other major technology companies like AMD, Cisco, Amazon, and OpenAI have also announced AI investments in Saudi Arabia. Bloomberg reported that the US may soon authorize the UAE to import over one million Nvidia AI chips, a number far exceeding the export limits set during the Biden administration.

These moves underscore a growing trend of Western tech firms deepening ties with Middle Eastern partners to build AI ecosystems.

Nvidia’s surge reflects the strategic importance of AI in US-Saudi relations and highlights the tech giant’s central role in global AI infrastructure development. The US policy shift on AI exports complements Saudi Arabia’s ambitious Vision 2030 goals to diversify its economy through technology. Investors and industry watchers should monitor this evolving partnership as it shapes the future of AI innovation.