What's Going On With Nvidia Stock Tuesday?

Nvidia Corp NVDA stock is trading higher amid reports of Saudi Arabia and the United Arab Emirates (UAE) aggressively acquiring the chipmaker's high-end chips, essential for AI software development. This move places them at the forefront of the global AI competition, intensifying the demand for Silicon Valley's most sought-after tech component.

Both nations have expressed their aspirations to be AI frontrunners, aligning with their broader economic transformation strategies. 

However, this ambition has sparked concerns about the potential misuse of AI by their authoritative regimes, the Financial Times reports.

Also Read: Nvidia Reaches Workaround For Export Of Flagship Product To China, Wins Alibaba And Peer Cloud Units As Clients

Saudi Arabia has procured at least 3,000 Nvidia H100 chips, each valued at $40,000, via the King Abdullah University of Science and Technology (Kaust). On the other hand, the UAE has also crafted its proprietary, open-source large language model named Falcon apart from procuring Nvidia chips. This development occurred at the state-run Technology Innovation Institute in Masdar City, Abu Dhabi.

AI Developments and Concerns

While the Saudi-based Kaust is gearing up to launch its supercomputer, Shaheen III, the UAE has already introduced a "Generative AI Guide" to solidify its global tech and AI leadership stance. However, Western AI pioneers and human rights specialists have voiced concerns about the ethical and safety aspects of the AI software developed in these nations.

AI's Economic Boost

Following a spike in energy prices last year, Saudi Arabia and the UAE have seen a surge in their petrodollar revenues. They now oversee some of the globe's most significant and proactive sovereign investment funds. 

These funds have recently reached out to Western AI startups, offering access to code and LLM expertise in return for computational resources.

Furthermore, Hon Hai Precision Industry Co Ltd HNHPF Foxconn has secured a significant order to produce chip substrates for Nvidia's HGX AI servers, meeting over half of Nvidia's total demand. This development further solidifies Foxconn's position in the global server market, holding a staggering 43% share.

UBS analyst Timothy Arcuri maintained Nvidia with a Buy and raised the price target from $475 to $540.

Price Action: NVDA shares traded higher by 1.83% at $445.40 premarket on the last check Tuesday.

Photo via Wikimedia Commons

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.