Trump's Economy Relies on Artificial Intelligence Growth Highlighted by Saudi Crown Prince's Visit

President Donald Trump is increasingly relying on the tech industry and artificial intelligence (AI) to support his economic plans. This was evident during his meeting with Saudi Arabia's Crown Prince Mohammed bin Salman. The prince has pledged to invest USD 1 trillion with US firms, aiming to transform Saudi Arabia into an AI data hub using its oil and natural gas reserves.

Trump highlighted the importance of collaboration in building a leading AI ecosystem. At the US-Saudi Investment Forum, he stated, "We will work closely with friends and partners like those in this room to build the largest, most powerful, most innovative AI ecosystem in the world." Notable attendees included Nvidia co-founder Jensen Huang and tech entrepreneur Elon Musk.

Saudi Investments in AI Growth

Saudi Arabia's investment commitments have surged from USD 600 billion during Trump's May visit to USD 1 trillion when Prince Mohammed visited the White House. Trump mentioned he encouraged the prince to consider increasing this amount further. "While we were taking the picture, I said, Could you make it USD 1.5 trillion?" Trump shared.

The focus on AI investments is also reflected in the remarks of Blackstone Group CEO Stephen Schwarzman at the forum. He identified AI and power as key growth areas, noting Blackstone's significant role as a developer and owner of data centres worldwide.

Despite Trump's claims about tariffs driving new investments, much foreign capital is directed towards data centres for AI's computing needs or power facilities supporting these centres. The president praised stock market gains as "amazing," although indices fell due to concerns about a potential financial bubble driven by AI companies.

Economic Implications of AI Investments

Oxford Economics released an analysis indicating that AI investments are mitigating economic uncertainty in the US this year. This uncertainty partly stems from Trump's tariff increases, which have raised inflation and possibly slowed hiring. The consultancy warned that AI companies' reliance on debt for growth might signal a more vulnerable phase next year.

Tareq Amin, CEO of Humain, shared that his Saudi-backed AI company was founded during Trump's visit to Saudi Arabia in May. The company aims to develop data centres and AI infrastructure by combining Saudi energy resources with US technology. "Yes, it is an ambitious, crazy thing," Amin confidently stated.

Future Prospects of AI

Musk predicted that AI and robots would eventually make work optional for humans, rendering money "irrelevant" and eliminating poverty. "AI and humanoid robots will actually eliminate poverty," Musk said, adding that robots would "make everyone wealthy." Huang was less bold but noted that jobs would change significantly.

Nvidia's Huang, speaking alongside Musk, expressed confidence in their technology's competitive edge. When Trump asked if any country could rival their Blackwell chip powering much of the AI development, Huang replied, "Not yet, sir." Nvidia later reported strong third-quarter earnings with a 65% increase in net income from last year.

The political risks for Trump include potential utility price hikes for Americans due to the AI expansion or if promised jobs do not materialise. These factors could impact public perception of his economic agenda.

With inputs from PTI