To The Moon

My Perspective on the Saudi Arabia AI Developments

I find the recent advancements in Saudi Arabia's AI sector to be a fascinating opportunity for companies like NVIDIA $NVIDIA Corp(NVDA)$  , AMD $Advanced Micro Devices(AMD)$  , and SMCI $SUPER MICRO COMPUTER INC(SMCI)$  to capitalize on a growing market. Saudi Arabia's newly established company, Humain, has placed substantial orders for high-end AI chips from both NVIDIA and AMD, signaling a strong commitment to building advanced AI infrastructure. At the same time, SMCI has entered into a multi-year, $20 billion partnership with the Saudi data center firm DataVolt, which positions it as a key player in the region's AI ecosystem. These developments indicate a significant push towards AI innovation in the Middle East, and I believe all three companies are well-positioned to benefit from this investment surge.

AI in Saudi Arabia

Why I Think NVIDIA Might Lead

I believe NVIDIA stands to gain the most from Saudi Arabia's AI investments due to its dominant position in the AI chip market and the scale of its involvement. NVIDIA is reportedly supplying hundreds of thousands of chips, including an initial batch of 18,000 Blackwell chips, which are among the most advanced for AI workloads. These chips will power a 500-megawatt data center, highlighting the magnitude of the project. Given NVIDIA's established reputation and technological edge in AI GPUs, I think it has the strongest potential to see significant revenue growth and market share expansion as a result of this deal.

Nvidia Blackwell

My Thoughts on AMD's Opportunity

I also see a meaningful opportunity for AMD in this scenario, though its role appears slightly smaller compared to NVIDIA's. AMD has secured a $10 billion collaboration with Saudi Arabia to supply AI chips, which is a substantial commitment and reflects confidence in its technology. While AMD is a strong competitor in the semiconductor space, I think its gains might be more modest than NVIDIA's due to the latter's larger order size and market leadership in AI-specific chips. Nevertheless, I am optimistic about AMD's growth prospects in the region.

SMCI's Strategic Advantage

I am impressed by SMCI's $20 billion partnership with DataVolt, which I think positions it as a critical player in the AI infrastructure space. This multi-year deal involves building and supporting data centers, which are essential for handling the massive computational demands of AI workloads. SMCI's expertise in server and storage solutions gives it a strategic advantage, and I believe this partnership could lead to significant long-term growth, especially as Saudi Arabia continues to expand its AI capabilities. I see SMCI as a dark horse in this race, with potential to rival the chipmakers in terms of impact.

SMCI x DataVolt

How UAE's Involvement Factors In

I also find the UAE's involvement noteworthy, as its G42 has ordered 100,000 U.S.-made chips, some of which will support OpenAI-related projects. This development could indirectly benefit NVIDIA and AMD if they secure portions of this order, given their prominence in the U.S. chip market. I think this order underscores the broader regional trend towards AI adoption, and it might create additional demand for chips from both companies, further boosting their prospects in the Middle East.

My View on NVIDIA's Stock Upside

With NVIDIA's stock price returning to $135, I believe there is considerable upside potential for investors. The company's involvement in Saudi Arabia's AI projects, combined with its global leadership in AI GPUs, suggests strong future demand for its products. The deployment of advanced Blackwell chips for a major data center project is a testament to NVIDIA's technological prowess, and I think this could drive significant revenue growth. While exact upside depends on market conditions, I am confident that NVIDIA could see substantial gains in the coming years as AI adoption accelerates globally.

Potential Challenges I Am Considering

I am mindful of potential challenges that could impact these companies' success in the region. Geopolitical risks, such as shifting international relations or regulatory hurdles, could pose obstacles to the smooth execution of these large-scale projects. Additionally, I think the success of these deals depends on the companies' ability to deliver on their commitments, including meeting production timelines and ensuring the reliability of their technology. Despite these uncertainties, I remain optimistic about the overall trajectory of AI investment in Saudi Arabia and will continue to monitor these developments closely.

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