According to Wedbush, the next front in the AI arms race is in Riyadh. A new memo from the firm portrayed this week’s U.S.-Saudi forum as a major bullish shift in global tech power dynamics. President Donald Trump arrived in the Saudi capital on Tuesday to a lavish reception, escorted by six Royal Saudi F-15 fighter jets. He was joined by U.S. tech leaders, including Nvidia CEO Jensen Huang, Amazon CEO Andy Jassy, OpenAI CEO Sam Altman, and Alphabet’s Ruth Porat. Wedbush estimates the Saudi Arabian AI opportunity could add $1 trillion to the globe’s total AI addressable market.

A new partnership between Nvidia and Saudi Arabia’s sovereign AI initiative, Humain, was a key focus. Nvidia will sell 18,000 next-gen Blackwell chips to power the Kingdom’s first supercomputer. Saudi Arabia plans to build a network of AI data centers to train and deploy sovereign models as part of its Vision 2030 push to diversify away from oil. Nvidia stock soared almost 6% on Tuesday and climbed another 3% before Wednesday’s opening bell, sparked by the news. This increase for a company of Nvidia’s size is worth roughly $300 billion in market value.

Days before the trip, the U.S. Commerce Department rescinded the Biden-era AI Diffusion Rule, which would have imposed tiered export controls. The Trump administration plans to replace it with a more flexible approach, easing restrictions for allies like Saudi Arabia and the UAE, and tightening them for countries less in favor, including China and Malaysia.

The reversal of U.S. policy introduces uncertainty, including ethical and strategic risks of providing AI capabilities to authoritarian states. Critics warn this shift could fragment AI-related laws, regulations, and oversight. One AI Cold War may be easing, but another looks to be unfolding. Jim Secreto, a former deputy chief of staff at the Commerce Department, stated that controlling AI is the geopolitical question of our time. The Trump administration seems to be focusing less on containment and more on deal-making.