The next major area of penetration for the AI revolution appears to be the Middle East, Wedbush analysts say in a research note.  Analyst Dan Ives said the rapid expansion of artificial intelligence infrastructure in the Middle East marks a “watershed moment” for U.S. tech companies, driven by major developments in Saudi Arabia and the United Arab Emirates.  President Trump was recently there to negotiate a deal to have the U.S. tech sector make data centers, supercomputers, software, and overall infrastructure for a massive AI buildout in Saudi Arabia and the U.A.E in the coming years, the analysts say. Saudi Arabia is now due to get 18,000 Nvidia chips for a massive data center while the U.A.E. has Trump’s support to guild the largest data center outside of the U.S., two factors that should start an era of new growth for the U.S. tech sector and be a game-changer for the industry, the analysts say.

“We believe the market opportunity in Saudi Arabia and UAE alone could over time add another $1 trillion to the broader global AI market in the coming year,” Wedbush said.  “No Nvidia chips for China… red carpet rollout for the Kingdom,” the firm wrote, contrasting Middle East expansion with chip export restrictions affecting Beijing.  Ives called the momentum in the region “a bullish indicator that further shows the U.S. tech’s lead in this 4th Industrial Revolution.”  He said that Nvidia CEO Jensen Huang was “the Godfather of AI” and this author totally agrees.  Without Nvidia [1.] AI-GPT chips there would be no AI compute servers in the massive data centers now being built.

Wedbush believes Saudi Arabia, the UAE, and Qatar are now on the “priority list” for U.S. tech, with regional demand for AI chips, software, robotics, and data centers expected to surge over the next decade. ……………………………………………………………………………………………………………………………………………………………………………………………

Note 1.  Nvidia should see its trend of strong revenue growth continue, but consensus estimates may not fully account for the recent H20 export restriction, Raymond James’ Srini Pajjuri and Grant Li say in a research note. The analysts expect revenue growth between $4 billion and $5 billion during the past six quarters to continue on strong ramps for its Blackwell chip, but they note that the restrictions on the H20 chips present a roughly $4 billion headwind, leaving them to expect limited sequential growth in 2Q. “That said, we fully expect management to sound bullish on 2H given the strong hyperscale capex trends and recent AI diffusion rule changes,” say the analysts. Nvidia is scheduled to report 1QFY26 results on May 28th.

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Last week, Saudi Arabia unveiled a series of blockbuster AI partnerships with US chip makers, cloud infrastructure providers, and software developers this week, signaling its ambition to become a global AI hub.

Image Credit: Adam Flaherty / Shutterstock.com

Leveraging its $940 billion Public Investment Fund (PIF) and strategic location, Saudi Arabia is forming partnerships to create sovereign AI infrastructure including advanced data centers and Arabic large language models. Google, Oracle, and Salesforce are deepening AI and cloud commitments in Saudi Arabia that will support Vision 2030, a 15-year program to diversify the country’s economy.  Within that, the $100 billion Project Transcendence aims to put the kingdom among the top 15 countries in AI by 2030.

The deals include a $20 billion commitment from Saudi firm DataVolt for AI data centers and energy infrastructure in the US and an $80 billion joint investment by Google, DataVolt, Oracle, Salesforce, AMD, and Uber in technologies across both nations, according to a White House fact sheet.

References:

https://finance.yahoo.com/news/wedbush-ives-sees-ai-boom-123710639.html

https://www.wsj.com/tech/tech-media-telecom-roundup-market-talk-87c22df6

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