President Donald Trump said Saudi Arabia and the US signed $270bn worth of new investment deals on Wednesday.
Meanwhile, Saudi state media went further, saying $557bn in deals were signed on Wednesday.
Like previous announcements about US-Saudi economic deals, it may prove difficult to sort out pledges from cold, hard cash commitments.
At a historic Oval Office meeting on Tuesday, Trump coaxed Crown Prince Mohammed bin Salman to up the $600bn investment pledge he made when the US leader visited the kingdom in May to $1 trillion.
“While we were taking the picture, I said, ‘Could you make it $1.5 trillion?’ So he’s got something to think about,” Trump said, appearing with the 40-year-old Saudi ruler at an investment conference the next day.
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The event scrambled traffic in Washington and drew everyone from billionaire tech executives and AI behemoths to small law firms from across the US and start-ups. All of them appeared to make deals with Saudi Arabia.
The kingdom is the Arab world’s only G-20 economy, with a GDP of $1.24 trillion.
However, Crown Prince Mohammed bin Salman exercises absolute control over the kingdom and can cut deals much faster than western European counterparts, where private businesses are the ones writing checks. Saudi Arabia’s de facto leader oversees the country’s $1 trillion sovereign wealth fund and the emerging companies backed by it.
Middle East Eye has broken down some of the latest deals signed by US companies and the kingdom.
Critical minerals deal
One of the most interesting deals was signed between MP Materials and Saudi Arabian Mining Company (Maaden) to build a refinery in the kingdom that will process light and heavy rare earth minerals.
Both companies are linked to their respective governments.
Maaden is majority-owned by the Saudi state, but its CEO, Bob Wilt, is a West Point graduate and former US soldier.
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While MP materials is publicly traded on the US stock exchange, the Trump administration, via the US Department of War, took a 15 percent stake in it earlier this year and committed to buying its rare earths products for 10 years at double the current market price.
Under the agreement, MP Materials will take a 49 percent stake in the joint venture, with Maaden holding a position of no less than 51 percent, according to a press release.
Saudi Arabia appeared to drive a hard bargain on the deal, and it’s not clear how this agreement contributes to Trump’s claim of $270bn in investments. The US Department of War is providing the “full financing” for the US contribution to the joint venture, the press release said.
China has a chokehold on global refining of rare earths, which are critical to the production of key technologies. Beijing has at times restricted exports in response to Trump’s tariffs.
Musk’s Grok goes to Saudi Arabia
The world’s richest man appeared to have fallen out with Trump earlier this year. He complained that Trump’s behemoth spending bill made a mockery of the cuts he spearheaded at the Department of Government Efficiency, although he succeeded in terminating USAID.
But Musk returned with fury to Washington for the crown prince’s visit. He attended a black-tie state dinner held in the Saudi crown prince’s honour on Tuesday. At Wednesday’s investment conference, he was given a front row seat, directly next to Mohammed bin Salman.
Musk’s xAI, which makes the chatbot Grok, announced a deal to work with the Saudi state-owned AI company Humain to build a new data centre in the kingdom.
Humain and xAI said in a joint statement that they will develop a network of GPU data centres in the kingdom, anchored by a large 500 megawatt data centre.
“The future of intelligence will be engineered through massive and efficient computer combined with the most advanced AI models. HUMAIN’s capabilities enable us to build that future faster in Saudi Arabia,” Musk said in a statement.
Meanwhile, Saudi Arabia’s sovereign wealth fund signed a memorandum of understanding to explore the delivery of Microsoft’s sovereign-cloud services to the kingdom.
Humain goes on a deal spree
Humain, which is backed by Saudi Arabia’s $1 trillion sovereign wealth fund, also announced a bevy of deals with other US companies.
Humain announced it was making a $900m investment in Luma. The California-based company creates AI videos that can transform one subject into another. Luma will use Humain data centres to power its AI work.
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Humain also announced it was partnering with AMD and Cisco Systems to build a gigawatt of data centre capacity inside Saudi Arabia. For comparison’s sake, one gigawatt can provide electricity to about 800,000 homes in the US.
The companies said “AMD and Cisco technology” would be used in the buildout of Humain’s “state-of-the-art data centers”.
Like many deals unveiled on Wednesday, it was hard to distinguish new agreements from old ones. AMD and Humain announced a $10bn deal in May that would see the US company’s technology going to Humain.
Amazon, which is already active in the kingdom’s AI scene, said it was launching an “expanded partnership” with Humain to “deploy and manage up to 150,000 AI accelerators” in Riyadh’s “AI Zone”.
When will Saudi Arabia get AI chips?
Saudi Arabia is pitching itself as a cheap data centre hub because of its lower electricity prices.
Saudi AI company Datavolt is building a $5bn data centre on the kingdom’s Red Sea coast, and Humain is already building data centres from Riyadh to Dammam, which it says will have 6.6 gigawatts of capacity by 2034. It’s not clear whether xAI will be given a separate data centre.
Data centres are basically sprawling compounds with rows of computers and servers that house AI chips. They need electricity to run and, importantly, to be cooled down. Because of its vast reserves of fossil fuels and solar energy, electricity prices in the kingdom are anywhere from 30 to 50 percent cheaper than the global average.
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Sophisticated AI chips are at the top of Crown Prince Mohammed bin Salman’s shopping list in Washington. The US and Saudi Arabia announced deals for the country to purchase thousands in May, but the Trump administration has not provided the export licences.
Trump said on Tuesday that he was working on approving the export licences. Bloomberg reported the same day the US would “greenlight” the first sales of tens of thousands of chips to Humain.
As of Wednesday, no sale was announced, but the US and Saudi Arabia signalled progress. US Secretary of State Marco Rubio and his Saudi counterpart, Faisal bin Farhan, signed a “Strategic Artificial Intelligence (AI) Partnership”.
“The two sides noted that this strategic partnership encompasses the supply of advanced semiconductors,” a press release said.
“This Strategic AI Partnership capitalizes on the Kingdom of Saudi Arabia’s competitive advantages in available land, energy resources, and geographic location to build AI technology clusters,” it added.
Billions in energy deals
While Saudi Arabia is pushing for tech deals, the kingdom has shown that the old-school fossil fuel business is still a tried-and-tested cash cow in Saudi-US relations.
Saudi Aramco said it signed 17 preliminary deals with US companies on Wednesday worth potentially more than $30bn. The projects included sectors from liquefied natural gas to financial services to advanced materials manufacturing.
“We expect the multi-billion-dollar MoUs and agreements announced today to act as a springboard for further progress,” Aramco’s CEO Amin Nasser said in the statement.
The agreements appeared to expand commitments made through memoranda of understanding signed by Aramco, worth $90bn, when Trump visited Saudi Arabia in May.
