To The Moon

We have seen how Nvidia, AMD and SMCI showing their stock performance surge with A.I. deal with Saudi Arabia. I would like to look beyond the semiconductor space, how about the A.I. software sector.

The recent surge of artificial intelligence deals with Saudi Arabia is highly likely to benefit the AI software sector in the near future. First we need to understand the different players who will be participating in this A.I. deal with the establishment of HUMAIN, a new AI-focused company backed by Saudi Arabia's Public Investment Fund (PIF).

Here Are Some Categories And Specific Companies That Could See Positive Impacts

We are going to see an significant increase on GPU growth, which will set the foundation for the A.I. software new era, with this new deal, this could be a catalyst for the demand.

1. AI Infrastructure and Cloud Providers

$NVIDIA(NVDA)$ : As a primary supplier of high-performance GPUs crucial for AI model training and deployment, NVIDIA stands to be a major beneficiary. Their deal with HUMAIN involves the deployment of a significant number of their advanced Blackwell chips.

$Advanced Micro Devices(AMD)$ : Similar to NVIDIA, AMD will be supplying its AI chips and collaborating with HUMAIN to build AI infrastructure. Their multi-billion dollar agreement positions them as a key hardware provider.

$Amazon.com(AMZN)$ : AWS is investing heavily in building an "AI Zone" in Saudi Arabia, which will require a vast array of cloud-based AI software services and tools. Their AI services like SageMaker and Bedrock will likely see increased adoption.

Alphabet (GOOGL/GOOG): Google Cloud has also announced a partnership with HUMAIN to build an AI hub in Saudi Arabia, indicating increased demand for their AI cloud services and infrastructure.

2. AI Platform and Software Developers

$Palantir Technologies Inc.(PLTR)$ : Known for its data analytics and AI-powered platforms, Palantir could see opportunities in providing solutions for various sectors in Saudi Arabia, aligning with the Kingdom's focus on applying AI in industries like energy, healthcare, and defense.

$C3.ai, Inc.(AI)$ : This enterprise AI software company provides a platform and applications for various industries. Their focus on sectors like oil and gas could align well with Saudi Arabia's economic priorities.

Salesforce (CRM): With its increasing integration of AI into its cloud-based platforms, Salesforce could find opportunities in providing AI-powered CRM, analytics, and marketing solutions to businesses in Saudi Arabia.

UiPath (PATH): As a leader in robotic process automation (RPA) with growing AI capabilities, UiPath could help Saudi Arabian organizations automate tasks and integrate AI into their workflows.

3. Companies Specializing in Specific AI Applications

Companies focusing on Arabic Natural Language Processing (NLP) could be in high demand as Saudi Arabia aims to develop advanced Arabic LLMs. Specific publicly traded companies heavily focused on this niche are less prominent, but this area could attract investment and growth for specialized startups or larger companies with dedicated Arabic NLP teams.

Companies involved in digital twin technology (like NVIDIA with its Omniverse platform) will likely benefit as Saudi Arabia aims to use digital twins for optimizing various physical environments and industries.

AI cybersecurity companies could see increased demand as the development of AI infrastructure necessitates robust security measures.

4. AI-Adjacent Technology Providers

Super Micro Computer (SMCI): As a key supplier of AI server infrastructure that houses the GPUs from NVIDIA and AMD, Super Micro Computer could indirectly benefit from the build-out of AI data centers in Saudi Arabia.

Here are several factors that we might want to examine and see how we can trade around it

Direct Investment and Infrastructure Development

The establishment of HUMAIN, a new AI-focused company backed by Saudi Arabia's Public Investment Fund (PIF), signifies a massive commitment to building a comprehensive AI ecosystem. This includes significant investments in next-generation data centers, AI infrastructure, and cloud capabilities.

Partnerships with major global technology players like Nvidia (NVDA) and Advanced Micro Devices (AMD) involve the supply of cutting-edge AI hardware, crucial for training and deploying sophisticated AI models. NVIDIA will provide a substantial number of its advanced GPUs to build "AI factories" in Saudi Arabia. AMD has also announced a multi-billion dollar collaboration to deploy significant AI computing infrastructure.  

Amazon (AMZN) is investing billions to develop an "AI Zone" in Saudi Arabia, focusing on state-of-the-art data centers and AI development facilities, in addition to their planned cloud region.  

These infrastructure developments will create a strong demand for AI software to power and manage these systems, as well as to develop applications for various sectors.  

Focus on AI Model Development and Applications

HUMAIN's mandate includes the development of advanced AI models and solutions, including one of the world's most powerful multimodal Arabic large language models (LLMs). This focus on local language capabilities will drive the need for specialized AI software.  

The partnerships aim to accelerate AI adoption across strategic sectors in Saudi Arabia, such as energy, healthcare, manufacturing, and financial services. This will necessitate the development and deployment of sector-specific AI software solutions.  

Talent Development and Ecosystem Growth

These deals often include initiatives for upskilling and training Saudi citizens in advanced AI, simulation, robotics, and digital twin technologies. A skilled local workforce will further drive the demand for and development of AI software.  

The overall goal is to position Saudi Arabia as a globally competitive AI hub, attracting further investment and fostering local innovation in the AI sector. This will create a fertile ground for AI software companies to thrive.  

Specific Examples of Potential Benefits for the AI Software Sector

Increased demand for AI development tools and platforms: The need to build and deploy AI models will drive demand for software development kits (SDKs), machine learning operations (MLOps) platforms, and data science tools.

Growth in specialized AI applications: Software companies focusing on AI applications for specific industries relevant to Saudi Arabia (e.g., AI for oil and gas, AI in healthcare Arabic language processing, AI for smart city management) will find significant opportunities.  

Expansion of cloud-based AI services: The development of AI Zones and cloud infrastructure will create a market for AI software delivered as a service (SaaS).  

Opportunities for AI-powered solutions in areas like digital twins and robotics: Partnerships involving NVIDIA's Omniverse platform indicate a push towards physical AI, creating demand for simulation and robotics software.  

Summary

The significant financial investments, strategic partnerships with leading technology providers, and a clear national strategy focused on AI development in Saudi Arabia strongly suggest a positive outlook for the AI software sector in the near future. The demand for AI software, tools, and applications is poised to increase substantially as these initiatives progress and mature.  

Appreciate if you could share your thoughts in the comment section whether you think investment into A.I. will drive the demand for A.I. software and make new ways of doing things a lot much better.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.