The Big Gulf AI Deal That's Divided the White House

SPEAKER_2 (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

Joe Weisenthal (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:22)

And I'm Tracy Alloway.

Joe Weisenthal (0:24)

It's a few weeks ago, but last month, Trump was in Saudi Arabia. He was in the Middle East, and he sold a bunch of chips.

Tracy Alloway (0:30)

Yeah, I think the chips announcement was kind of overshadowed by some of the pomp and ceremony around that visit. Did you see the famous hair flipping?

Joe Weisenthal (0:40)

No.

Tracy Alloway (0:40)

Oh, you didn't see that?

Joe Weisenthal (0:42)

What was that?

Tracy Alloway (0:42)

So you need to look this up. So when Trump arrived in the UAE, part of his big greeting and the red carpet getting rolled out for him was a bunch of Emirati women doing a hair flipping dance. I gotta say, I wish I could flip my hair like that, but sadly I could not.

Joe Weisenthal (0:59)

Can I say, Trump seems very at home in the Gulf States. Do you know what I'm saying? It feels like, setting aside many other things that there is a similar sense of aesthetics, grandeur, drama, et cetera, that is like, I think he's very comfortable in those countries.

Tracy Alloway (1:16)

I was about to say, his taste in interior decorating is exactly the same as what you see in palaces and hotels in Saudi Arabia and places like that. Absolutely.

Joe Weisenthal (1:26)

No, I think just the whole vibe is like, he's on home territory. But I think the AI stuff is really interesting, obviously, for a lot of reasons. The US wants to sell more things. One of the things that we can sell in various flavors is AI technology.

But there is this weird, like, I don't know what the word, cross currents or whatever, which is that we want to sell more stuff, and yet we also don't want our stuff to be in the hands of perceived geopolitical rivals, and so we cut off our own sales. China is obviously the most salient example here. But it sort of makes this interesting tension when we think of the role of AI sales, tech sales in sort of international relations and diplomacy.

Tracy Alloway (2:04)

Yeah. Well, I also find this interesting from the UAE slash Abu Dhabi side of things, right? Because the UAE, it's strategically aligned with the US in many ways, but it's very commercially aligned with China. And you have a lot of Chinese commerce coming through the ports and things like that. So I'm very curious what they see in this deal and how they're navigating those two sides as well.

Joe Weisenthal (2:29)

Well, I'm very excited. We have the perfect guest, one of our colleagues we've had on the podcast before. We're going to be speaking with Mackenzie Hawkins, tech and geopolitics reporter at Bloomberg News. She's now based in Hong Kong, sadly for us, but thankfully she's staying up late for this recording. Mackenzie, thank you so much for coming back on Odd Lots.

Mackenzie Hawkins (2:49)

Thanks so much for having me.

Joe Weisenthal (2:50)

First of all, why don't you just give us the specific details, the salient details, as you understand them, in terms of this big AI deal that Trump announced when he did his his golf tour.

Mackenzie Hawkins (3:06)

So in the four-day span or so that Trump was in the Middle East, you saw American tech companies and companies in Gulf nations announce hundreds of billions of dollars worth of AI deals, specifically many of them focused on AI infrastructure, building out the data centers that house AI chips that are used to train and deploy large language models. And that involved one of the biggest data centers potentially in the world, a project anchored by the Abu Dhabi AI firm G42, with key participation from Oracle, from OpenAI, from NVIDIA, huge volumes of NVIDIA chip sales going to both the UAE and Saudi Arabia as well as sales from NVIDIA's rival, Advanced Micro Devices. And all told, we sort of ended the week, and the deals announcements actually continued into the following week. We ended this trip going from a world where the two main players with significant AI data center capacity, the US of course, and then China also has major ambitions. And still, even if all of these deals fall through as expected, which isn't if, the US will maintain the vast majority of the world's computational power, but we have two new serious players in the UAE and in Saudi Arabia.

Tracy Alloway (4:23)

One thing I know from living in Abu Dhabi for a couple of years is that Abu Dhabi loves building a giant campus with some sort of foreign partner. Like that is always happening and seems to be happening more and more. But OK, so from the US side, you know, the US wants to be a powerful player in AI and everything that comes with it, chips, data centers, et cetera, and they want to sell that technology to other countries. What's the issue with the deal? Why is it controversial?