International Finance

NVIDIA to launch in Middle East amid American curbs on AI exports to region

Washington restricts the company's most advanced chip exports, but permits the export of some NVIDIA technology to the Middle East

According to Ooredoo’s CEO, Saud bin Nasser bin Faleh Al-Thani, NVIDIA has inked a contract to implement its artificial intelligence (AI) technology at data centres owned by the Qatari telecom company Ooredoo in five Middle Eastern nations.

With this agreement, NVIDIA has launched on a large scale for the first time in an area where Washington has restricted the export of advanced American chips to prevent Chinese companies from gaining access to the newest AI technology by using Middle Eastern nations as a back door.

According to a statement from Ooredoo, the move will make it the first business in the region to offer direct access to NVIDIA’s artificial intelligence and graphics processing technology to customers of its data centres in Qatar, Algeria, Tunisia, Oman, Kuwait, and the Maldives.

According to Ronnie Vasishta, senior vice president of telecom at NVIDIA, Ooredoo will be able to assist its clients in deploying generative AI applications more effectively thanks to the technology.

“Our B2B clients, thanks to this agreement, will have access to services that probably their competitors (won’t) for another 18 to 24 months,” Aziz Aluthman Fakhroo said in an interview, as reported by Reuters.

The deal was signed on June 19, 2024 on the fringes of the TM Forum in Copenhagen, but the companies did not reveal its value. Additionally, Ooredoo declined to comment on the specific NVIDIA technology it planned to install in its data centres, citing availability and customer demand as factors.

Washington restricts the company’s most advanced chip exports, but permits the export of some NVIDIA technology to the Middle East.

According to Fakhroo, Ooredoo intends to nearly triple its current 40-megawatt capacity by the end of the decade and is investing USD 1 billion to increase it by an additional 20 to 25 megawatts.

The company separated its data centres into a distinct entity after making a similar move with Zain of Kuwait and TASC Towers Holding of Dubai last year to establish the largest tower company in the Middle East.

According to Fakhroo, separating its fibre network and underwater cables into a distinct entity is another of Ooredoo’s plans.

Meanwhile, amid its Middle East entry, NVIDIA, since briefly becoming the world’s most valuable company in the middle week of June 2024, has now slumped for three consecutive trading days and is now down 13% from its peak.

On June 24, the semiconductor giant slide witnessed its second steepest drop of 2024, as the stock fell 6.7% to USD 118.11. NVIDIA’s decline brought with it a slide in chipmakers and other tech companies that have been tied to the AI boom.

Super Micro Computer, which sells servers packed with NVIDIA’s AI chips, fell 8.7%, and Dell, which competes in that market, was off 5.2%. Chip designer Arm dropped 5.8%, while semiconductor giants Qualcomm and Broadcom dropped 5.5% and 3.7%, respectively.

Many of these companies have been some of the biggest gainers in the last couple of years as investors bet heavily that the ventures will be the prime beneficiaries of a wave of AI spending. NVIDIA’s value has nearly tripled since 2023. Recently, it topped Apple and Microsoft as the most valuable American company with a market capitalisation of over USD 3 trillion before giving up some of those gains.

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