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Donald Trump lauds Saudi Arabia as he unveils AI and defence deals

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Donald Trump lauds Saudi Arabia as he unveils AI and defence deals

Donald Trump hailed the US’s relationship with Saudi Arabia on Tuesday, just hours after the White House unveiled what it said was $600bn worth of defence, artificial intelligence and other deals with the kingdom. 

The US president lauded the kingdom and its de facto leader, Crown Prince Mohammed bin Salman, as he began the first leg of his dealmaking, three-nation tour of the oil-rich Gulf.

“He’s an incredible man, I’ve known him a long time now. There’s nobody like him,” Trump said to a packed auditorium in Riyadh. Among the guests were Elon Musk, the world’s richest man, private equity baron Stephen Schwarzman, Nvidia boss Jensen Huang and dozens of other US executives.

The US-Saudi relationship had been a “bedrock” of security and prosperity, Trump said. He added: “Today, we reaffirm the bond and take the next steps to make our relationship closer, stronger, more powerful than ever before . . . And it will remain that way.”

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In a press release before Trump’s speech, the White House had hailed “Saudi Arabia’s $600bn commitment to invest in the US” and “economic ties that will endure for generations to come”.

Prince Mohammed said the two countries would work over the coming months to increase the total to $1tn.

“We are working on partnership opportunities with the US worth $600bn, including agreements of more than $300bn announced today during this forum,” the crown prince said.

The deals unveiled by the White House included a commitment by Saudi Arabia’s new state-owned AI company, Humain, to build AI infrastructure in the kingdom using several “hundred thousands” of Nvidia’s most advanced chips over the next five years.

That would make it one of the biggest AI chip orders by a state company, underlining the scale of Prince Mohammed’s ambitions to position Saudi Arabia as a global AI hub and boosting Nvidia’s desire to build “sovereign AI” infrastructure around the world.

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The first phase of Humain’s investment would involve deploying 18,000 of Nvidia’s latest “Blackwell” servers, the chipmaker said. Based on the price of a single Nvidia graphics processing unit, estimated at $30,000-$40,000, the Saudi investment would run into multiple billions of dollars.

AMD, one of Nvidia’s main competitors in the AI chip market, is also co-investing up to $10bn with Humain to deploy its own infrastructure in the country. Amazon made a similar $5bn commitment covering data centre infrastructure.

Nvidia shares rose 5.6 per cent on Tuesday, while AMD’s gained 4 per cent. Amazon was 1.3 per cent higher.

Tesla chief and Trump adviser Elon Musk, left, and Nvidia CEO Jensen Huang along with Saudi Crown Prince Mohammed bin Salman © Brendan Smialowski/AFP/Getty Images

Jimmy Goodrich, senior adviser for technology analysis to the Rand Corporation think-tank, said the “massive scale” of the Middle East AI announcements would “undoubtedly eat into future US data centre growth”.

“Instead of offshoring the future economic revolution to the Middle East, a better approach would be to channel Gulf state money into American re-industrialisation and energy dominance,” Goodrich said.

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The White House also cited on Tuesday what it said was a “nearly $142bn” agreement to provide Riyadh “with state-of-the-art warfighting equipment and services from over a dozen US defence firms”.

It added this would include air force and space capabilities, missile defence, maritime and border security, land forces modernisation and upgrades to communication systems.

The US also referred to plans by Saudi Arabian DataVolt to invest $20bn in AI data centres and energy infrastructure in the US.

Trump is looking to secure deals and investment pledges worth more than $1tn on his trip to the Gulf, which will also include stops in Qatar and the United Arab Emirates.

The traditional US allies are among the biggest buyers of American weapons, boast sovereign wealth funds that collectively manage in excess of $3tn and have all stated their ambitions to invest heavily in AI. 

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Many of the US’s most powerful tech executives were also in Riyadh, including Musk, Huang and OpenAI’s Sam Altman as Saudi Arabia hosted a glitzy investment forum. Top financiers including Blackstone’s Schwarzman, BlackRock’s Larry Fink and Citigroup’s Jane Fraser also attended. 

US tech companies have been increasingly looking to the Gulf, which manages some of the world’s largest and most active sovereign wealth funds, to raise capital and lure investments. 

The Trump administration last week scrapped a Biden-era rule under which Saudi Arabia, along with dozens of other countries including India and Singapore, would have faced limitations on their purchases of the most powerful US-designed AI chips.

Riyadh launched Humain, which will be chaired by Prince Mohammed and owned by the Public Investment Fund, the $940bn sovereign wealth fund, to steer its strategy and investments in the sector on Monday, the day before Trump arrived. 

Just days after Trump’s inauguration in January, Prince Mohammed committed Saudi Arabia to investing $600bn in the US over the next four years — the same amount that was announced on Tuesday.

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The UAE followed up with a similar gesture in March, pledging to invest $1.4tn over the next 10 years. It is also seeking to establish itself as a leading AI hub and has taken a strategic decision to invest in US tech. 

Analysts question how the Gulf states will be able to deploy such a vast scale of capital in the timeframes announced, particularly Saudi Arabia as it grapples with lower oil prices, a widening budget deficit and the scale of its own domestic projects.

Additional reporting by Michael Acton in San Francisco

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Japan scraps US meeting after Washington demands more defence spending

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Japan scraps US meeting after Washington demands more defence spending

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Japan has cancelled a top-level meeting with the US after the Trump administration abruptly told Tokyo to spend more on defence, sparking anger in Washington’s closest Asian ally.

US secretary of state Marco Rubio and defence secretary Pete Hegseth were due to meet Japan’s defence minister Gen Nakatani and foreign minister Takeshi Iwaya in Washington on July 1 for annual security talks known as the “2+2”.

But Tokyo scrapped the meeting after the US asked Japan to boost defence spending to 3.5 per cent, higher than its earlier request of 3 per cent, according to three people familiar with the matter, including two officials in Tokyo.

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The new, higher demand was made in recent weeks by Elbridge Colby, the third-most senior official at the Pentagon, and sparked anger in Tokyo.

The tension over security issues comes as the allies hold tough trade talks after President Donald Trump in April imposed “reciprocal” tariffs on Japan.

One senior Japanese official said the decision to cancel the July 1 meeting was also related to the July 20 Upper House elections where the ruling Liberal Democratic party is expected to suffer a loss of seats.

Christopher Johnstone, a former senior US government Japan expert, said Tokyo viewed 2+2 meetings as a “very high priority” because they provided “politically valuable opportunities to showcase the strength of the US-Japan alliance”. He said postponing the meeting until after the Japanese election signalled “significant unease in Tokyo about the state of the bilateral relationship and its outlook”.

“Tokyo appears to have concluded that the political risk of a meeting before the election was higher than the potential gain — a pretty extraordinary assessment, if true,” said Johnstone, partner at The Asia Group, a consultancy.

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The friction between Washington and Tokyo comes as the US puts pressure on European and Asian allies to boost defence spending.

Speaking at the IISS Shangri-La Dialogue defence forum in Singapore last month, Hegseth urged Asia-Pacific allies to follow the “newfound example” of Europeans pledging to spend more and cited the threats in the region from China and North Korea.

“The US is now playing hardball with allies in the Asia-Pacific,” said one defence official.

Colby has been at the forefront of that push. In his US Senate confirmation hearing in March, his calls for Tokyo to increase defence spending drew a rebuke from Prime Minister Shigeru Ishiba, who said Tokyo would decide its own budget.

“The Trump administration’s inconsistent and unrealistic message on its expectations for allied defence spending levels in Asia risks backfiring and undermining those officials and experts who are most supportive of the United States in some key foreign capitals,” said Zack Cooper, an Asia security expert at the American Enterprise Institute.

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Colby has taken other positions that have raised anxiety among US allies. The Financial Times recently revealed that he was conducting a review of Aukus, the landmark security agreement between the US, UK and Australia designed to help Canberra procure a fleet of nuclear-powered submarines.

The FT also reported in May that he had told European countries that they should focus their militaries on the Euro-Atlantic region and less on the Asia-Pacific. The stance marked a shift from the Biden administration’s push to involve European allies in Asia to send a unified message of deterrence to China.

In another example of the shift, the Trump administration is not pushing Nato allies to reference the Indo-Pacific in the communiqué at the alliance’s summit in The Hague next week.

At the 2024 summit, members said the Indo-Pacific was “important for Nato”. But three people familiar with the draft of the communiqué that will be released next week said it did not mention the region.

Former president Joe Biden had invested heavily in securing the language, arguing that the European and Indo-Pacific theatres were linked.

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Japan’s defence ministry did not comment on whether the talks had been cancelled, and said no decision had been made on the timing of the next meeting. The state department and Pentagon did not comment.

 

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Federal judge declines to order Trump officials to recover deleted Signal messages

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Federal judge declines to order Trump officials to recover deleted Signal messages

Secretary of Defense Pete Hegseth looks on during a cabinet meeting with President Trump in the Cabinet Room of the White House on April 10.

Brendan Smialowski/AFP via Getty Images


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Brendan Smialowski/AFP via Getty Images

A federal judge in Washington, D.C., has issued a preliminary injunction ordering top national security officials who discussed military operations on the encrypted messaging service Signal to notify the acting archivist of the United States of any messages they have that may be at risk of being deleted. But in calling for those records to be preserved, the ruling stopped short of ordering the government to recover past messages that may already have been lost.

American Oversight, a nonprofit government watchdog, brought the lawsuit after the journalist Jeffrey Goldberg was mistakenly added to a group chat on Signal in which Trump administration officials discussed a planned U.S. military attack against Houthi rebels in Yemen. American Oversight says the officials violated federal records law with their use of Signal, a commercial messaging app that allows messages to be automatically deleted.

In his ruling Friday, U.S. judge James Boasberg said American Oversight had failed to show that the recordkeeping programs of the agencies involved in the case are “inadequate,” or that “this court can provide redress for already-deleted messages,” as the group had requested.

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“Plaintiff has provided no reason to believe that ordering the Attorney General to use her “coercive power” to “shak[e] the tree harder” … would bear any fruit with respect to already-deleted messages,” Boasberg wrote. “The Court therefore cannot conclude that American Oversight’s request for communications that have already fallen victim to Signal’s auto-delete function remains redressable given Plaintiff’s own representations to the contrary.”

But the judge granted the group a partial victory when it comes to messages that have not been erased.

“Because the looming erasure of automatically deleting Signal messages qualifies as such an imminent destruction of records, and because the Attorney General could prevent that destruction by instructing Government officials to halt the messages’ deletion, it remains possible for the Court to provide relief,” he wrote.

“We expect immediate compliance — and if they drag their feet or fail to act, we are fully prepared to pursue further legal action to ensure government records, which belong to the public, are preserved and protected,” said Chioma Chukwu, executive director of American Oversight in a statement.

Questions about potentially classified information

Goldberg’s reporting about the chat shocked military and intelligence experts and became the focus of a review by the Pentagon’s acting inspector general. Lawmakers on the Senate Armed Services Committee have also raised concerns about whether top national security officials shared classified information in the chat.

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In his reporting, Goldberg detailed key exchanges from the Signal chat, including messages in which Defense Secretary Pete Hegseth shared information about targets, weapons and attack sequencing just ahead of the airstrikes.

Hegseth has adamantly denied that any classified war plans were discussed in the Signal chat. The White House has also denied that any classified plans were shared, and said in March that its review of the incident had concluded.

“This case has been closed here at the White House as far as we are concerned,” White House press secretary Karoline Leavitt told reporters. “There have been steps made to ensure that something like that can obviously never happen again, and we’re moving forward,” she said.

Controversy surrounding the use of Signal by administration officials dogged the White House a month later when the New York Times reported that Hegseth shared details of the attack on a second Signal chat that included his wife and brother.

“It is now clear that the use of Signal to conduct official government business by administration officials is widespread: senior administration officials used, and likely continue to use, a commercially available text message application with an auto-delete function and no apparent mechanism to fully preserve federal records on government recordkeeping systems,” the watchdog group wrote in an amended complaint filed in late April.

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Hegseth is named as a defendant in the American Oversight suit, alongside Director of National Intelligence Tulsi Gabbard, CIA Director John Ratcliffe, Treasury Secretary Scott Bessent and Secretary of State Marco Rubio.

What the plaintiffs allege

The plaintiffs allege that officials violated the Federal Records Act by discussing “official government actions” on the messaging platform, which is not an authorized system for keeping federal records, according to their complaint. The 1950 law outlines the legal framework by which federal records are meant to be preserved.

American Oversight has also argued that administration officials failed to preserve their messages, noting that multiple individuals who participated in the group chat had the auto-delete setting turned on.

In an initial ruling in March, Boasberg ordered administration officials to preserve any records from the chat dated March 11 to March 15.

The defendants told the court they had taken steps to comply with the order and preserve records, but American Oversight said in subsequent filings that they had “serious questions” about what exactly the government had saved. They said declarations by defendants submitted to the court lacked key specifics, and that “no Defendant” had attested to saving the chat “in its entirety.”

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In the case of Ratcliffe, the group alleged that the CIA director failed to comply with the court’s order. “Because of this failure, Signal communications may have been lost,” they said. The defendants denounced the allegation saying it sought to “stir public controversy without basis in fact or law,” and that Ratcliffe had complied with the court’s order.

In his opinion issued Friday, Boasberg appeared to cast doubt on American Oversight’s argument, writing that the defendants, “did not appear to have any difficulty in following their respective agencies’ policies to preserve the messages that had not yet been deleted.”

“For these reasons, Plaintiff’s claim that the agencies’ formal recordkeeping programs violate the FRA is unlikely to succeed,” he wrote.

NPR disclosure: Katherine Maher, the CEO of NPR, chairs the board of the Signal Foundation.

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Apollo to finance UK Hinkley Point nuclear plant with £4.5bn loan

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Apollo to finance UK Hinkley Point nuclear plant with £4.5bn loan

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US private equity giant Apollo will provide £4.5bn in debt financing to support the UK’s Hinkley Point nuclear project, in a deal that will help ease financial pressures on the flagship development.

The investment grade financing will be provided as unsecured debt at an interest rate just below 7 per cent, people familiar with the matter said.

The funding could be used for other UK projects by French state-owned electricity group EDF, but Hinkley Point is expected to be the primary target for the debt package.

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The financing meets a key funding gap for the nuclear project, which has suffered from consistent cost overruns. It was expected to cost £18bn and to be completed in 2025 but the estimated cost has swelled to almost £46bn and its start date pushed back to 2029.

This is a developing story

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