AI: Trump et al to the Mideast again for AI/Tech investments. RTZ #718

The last few years have seen a rush to the middle east by AI industry companies and investors, in this AI Tech Wave, to secure billions and soon trillions in investments for the unprecedented amount of AI ‘Table Stakes’ Capex for data centers and power needed ahead. It’s a topic I’ve covered at length in these pages.

And it’s a trend that’s seen additional focus on the region by the US government as well, under several white house administrations. It’s the current ‘RealTekPolitik’ trend that continues into the second term of the Trump administration.

Politico lays it out well in “Cash plays: Trump heads to Middle East seeking deals”:

“Forget NATO. Trump’s first major foreign trip takes him to Saudi Arabia, Qatar and the UAE.”

“The world has changed in the last eight years. Donald Trump, for the most part, has not.”

“Just as he did in his first term as president, Trump is upending decades of diplomatic protocol and choosing to embark on his first major foreign trip with a visit to Saudi Arabia. He’ll continue this week to Qatar and the United Arab Emirates, two more Gulf states that share the president’s transactional approach to foreign policy and are well-positioned to fulfil his desire for flashy deals.”

““He wants a big, successful visit, and those are countries where he’ll be received in grand style. It’ll all be very carefully choreographed, there won’t be any public protests,” said a former U.S. official, who was granted anonymity to describe the president’s thinking.”

It’s a timely distractions from tariff and other issues roiling the global economy and AI/Tech in particular:

“The official described the three stops as “safe” at a moment when Trump has struggled to bring an end to the war between Russia and Ukraine, and as U.S. relations with the rest of the world are more fraught due to the economic upheaval over Trump’s sweeping tariff regime and upending of alliances.”

“There are still things I think he can announce as part of a positive agenda, particularly in the trade and investment area,” the official said.”

And some other pet projects of the President, like a Qatar donated $400 million plus Boeing 747-800 as a ‘temporary’ Air Force One:

“The administration has been vague about specific goals or “deliverables” on the trip — until Sunday, when Trump, in a social media post, appeared to confirm reports that his administration is planning to accept the donation of a luxury 747-8 jet from the Qatari government that the Pentagon would then upgrade so it could serve as Air Force One. While Trump bemoaned Democrats and others raising concerns about the deal as “World Class Losers,” Qatari officials cautioned that conversations about the jet were ongoing.”

It’s all about the money, in all its forms:

“Until Trump’s first term, presidents dating to the end of World War II made their first visit to Canada, Mexico or a NATO ally in Europe. This week’s six-day visit to the Middle East, and the initial stop in Saudi Arabia in particular, underscores Trump’s deepening interest in the region and a shifting American foreign policy, with democratic values superseded by business interest and the kingdom’s strategic position in the region.”

“All three [countries] have a shit ton of money,” said a White House ally involved in the trip planning, granted anonymity to discuss the trip. “It’s really that simple.”

And bygones are bygones:

“Only seven years ago, Saudi agents loyal to the crown prince Mohammad Bin Salman (aka MBS), ambushed and mutilated dissident journalist and U.S. resident Jamal Khashoggi. Former President Joe Biden initially shunned the kingdom as a result, though he too ultimately relented in 2022 amid spiking oil prices following Russia’s invasion of Ukraine, concluding, like Trump, that the relationship with the world’s biggest oil supplier was more important than the statement about human rights.”

“The large sovereign wealth funds of the Gulf are potential sources of foreign investment in the United States — and Trump’s inspiration for creating an American version. He has supported the LIV Golf tour, a competitor to the PGA that is backed by a Saudi wealth fund. And he has built relationships with power players in the region.”

And these connections have been personal at the highest levels:

“Qatari Emir Tamim Al Thani visited Trump at Mar-a-Lago last fall prior to the election. And Trump has come to admire that the small country of just three million people boasts the world’s highest per capita income. “These are the richest guys,” the president has occasionally remarked about the Qataris, said the person familiar with the president’s thinking.”

Lots of deja vu:

“Trump teased making Saudi Arabia his first foreign trip just hours after taking office, reminding a reporter in the Oval Office that he eschewed tradition his first term and traveled to the kingdom “because they agreed to buy $450 billion worth of our product.” He signaled he might do it again “if Saudi Arabia wanted to buy another 450 or 500.” Three days later, he touted a commitment from Prince Mohammed bin Salman to increase Saudi investment by $600 billion.”

US Tech companies and CEOs from OpenAI, Microsoft, Nvidia and others will be in at the major events in the region around and during the Presidential visit, as the NY Post notes:

“Tesla CEO Elon Musk, Meta head Mark Zuckerberg, BlackRock CEO Larry Fink, OpenAI CEO Sam Altman, Citigroup CEO Jane Fraser, Boeing CEO Kelly Ortberg and White House AI czar David Sacks are among those expected for the event in Riyadh.”

“This high-level Forum will spotlight our most trusted US investment partners — such as your esteemed company — who have already played a meaningful role in the Kingdom’s transformation journey,” an invite to the conference read. “The event will provide an exclusive opportunity to deepen engagement, unlock new investment avenues, and reaffirm our long-standing economic partnership.””

And the ante is higher this time, likely a trillion plus from the region over four years. And a trip mixing personal and official business:

“Between the lines: Trump clearly sees the Gulf as a place where there’s big money to be made, for the U.S. and for businesses like his.”

• “The Trump Organization announced a new luxury real estate deal in Qatar just two weeks before the trip, and also has projects in Jeddah, Dubai and Oman.”

• “Many of Trump’s close associates also do business in the region.”

“Reality check: While the announcements Trump unveils may add up to $1 trillion, it’s not clear whether a trillion in new spending will actually materialize.”

AI and Tech related investments are front and center. Thus the key US companies and their CEOs will be in the region:

“Zoom in: One particular focus of the trip will be investments in AI and tech.”

• “OpenAI CEO Sam Altman will be traveling to the Gulf during Trump’s trip, a U.S. official and a source familiar with the issue said. OpenAI declined to comment.”

• “A host of tech leaders, including Nvidia CEO Jensen Huang, are slated to speak Tuesday at a Saudi-U.S. Investment Forum in Riyadh.”

And everyone will cater to the most important member of the audience:

“The emirs, presidents and kings of the region are eager to remain on the right side of an American president who places a premium on dealmaking. That’s why all three will give Trump the honor of an official state visit and dinner — and why they will announce multibillion-dollar investments in the U.S. and commitments to buy American-manufactured weaponry.”

We’ll see more specifics around the AI Tech investments from this trip shortly. But this won’t be the last such major trip in this AI Tech Wave underway. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)