(Preview) The U.S. Partners with the Middle East in AI, Why OpenAI Is Acquiring Windsurf, Google’s Side of the Platform Wars

The implications of last week’s announcements on AI investments from Saudi Arabia and the UAE (and the repeal of the AI Diffusion rules), Ben’s thoughts on OpenAI’s acquisition of Windsurf, and questions about Android and VRBO vs. Airbnb.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Andrew Sharp?

  Hello and welcome to a free preview of Sharp Tech.

• 0:08Andrew Sharp?

  Hello and welcome back to another episode of Sharp Tech. I'm Andrew Sharp and on the other line, Ben Thompson. Ben, how you doing?

• 0:21Ben Thompson?

  Andrew, sometimes things are thrust upon you, burdens you have to bear. You can try to get out of them, but sometimes you have no choice. And I came on here a week or two ago, I said I was cheering for Denver. Therefore, it'd be unimpeachable that Jokic was better than Giannis.

• 0:40Andrew Sharp?

  Yeah.

• 0:40Ben Thompson?

  But alas, he lost, so I'm in the Twitter mines this morning casually observing that Jokic is not accomplishing anything more than Giannis. Widespread NBA Cup eraser, by the way, I just do have to note, so.

• 0:52Andrew Sharp?

  Oh, yeah. Who can forget that NBA Cup triumph back in December?

• 0:58Ben Thompson?

  Someone's got to go out and fight the fight. It's my calling, I can't escape it. I tried to run away. I was like Jonah and the whale here. I've just been spit out on land and I have to advance the Giannis narrative.

• 1:11Andrew Sharp?

  Yes, well, we were all beached whales on Sunday afternoon, rooting for history, rooting for Jokic to do something incredible. And instead, we got gifted a 40-point blowout in game seven against the Thunder. Don't worry, Ben, the job now falls to Anthony Edwards and my Timberwolves and we are going to get the job done over the next few weeks.

• 1:32Ben Thompson?

  We are on board. Yes, I was texting with a Knicks fan who was just flabbergasted that anyone could not support the Knicks. This is a very Knicks fan sort of point of view.

• 1:43Andrew Sharp?

  Absolutely, yeah.

• 1:44Ben Thompson?

  And I'm like, well, you know, my siblings is a huge Timberwolves fan, also just straight up Midwest solidarity. So yes, go Timberwolves, take it all the way, let's do it.

• 1:54Andrew Sharp?

  Wolves against the world, and this is neither here nor there, but Ben Stiller becoming the new Spike Lee for Knicks Nation has just been an incredibly annoying development over the last two years. So hopefully Spike is front and center for the Eastern Conference. Finals. In any event, we've got news and mail on this episode and we're going to begin with news. So first, for anyone who missed it, at the beginning of last week, President Trump was in Saudi Arabia for a state visit and a US Saudi investment forum. And while Trump was there, he delivered remarks in front of a crowd that included Elon Musk, Sundar Pichai,

• 2:33Andrew Sharp?

  Sam Altman, Jensen Huang, dozens of other US business leaders were in the mix for this US Saudi investment forum. The Saudi side announced the launch of an AI company called Humain and that's Humain spelled with an I, different spelling than the humane pen spelling, although trying to revive that brand.

• 2:55Ben Thompson?

  I assume the I is so, I assume it's so they have AI in the name.

• 2:58Andrew Sharp?

  There you go. Well, look, I hear humane and I think of those creepy videos and that stupid pen and one of the most epic disasters of the last couple of years. Would have been an entertaining zag trying to revive that brand. Alas, humane with AI spelled, it's H U M A I N for anybody who's curious. Nvidia announced that it will sell hundreds of thousands of Blackwell chips to Humain. And AMD announced a $10 billion collaboration with Humain. AWS also had previously announced major data center investments in Saudi Arabia earlier this year.

• 3:41Andrew Sharp?

  And so that was the beginning of the week. And then later in the week, we also got news from the UAE. I'll read from CNN. The United States and United Arab Emirates will partner to build a massive data center complex in Abu Dhabi to advance artificial intelligence capabilities with five gigawatts of capacity, enough to power a major city. The agreement will mark the largest data center deployment outside of the United States, according to the Commerce Department. It will begin with a one gigawatt AI data center, but will eventually span 12 square miles. The project is also expected to expand the footprint. Of American AI and cloud companies in the Middle East, allowing them to better serve the global South.

• 4:26Andrew Sharp?

  So in light of that news, and there were other announcements last week as well. I wrote a very open ended question in the rundown for you. What do you think of these announcements? What do you think they might mean for AI development? And what might they signify for the future of American leadership in tech?

• 4:46Ben Thompson?

  Well, there was another piece of news that you didn't mention, which was the repeal of the Biden administration AI diffusion rules, which is part and parcel of this, given that these countries were on one of the lower tiers and thus limited. Yeah, I think so. Um, you know, for, you know, let's step back to the AI diffusion rules. This, you know, again, my overarching view of the matter is I am just to reestablish for the record. You can go back and listen to the podcast or read the articles. I am opposed to chip controls and in favor of much stronger controls on chip making equipment.

• 5:26Ben Thompson?

  So I'm fine with China being on US chips, uh, cementing US ecosystem advantages, which primarily is Nvidia centric. And I am uncomfortable with China basically building a parallel chip making ecosystem. In the long run, I think we've been approaching this problem from completely the wrong direction. So that that's my overarching view. In that context, I thought the chip diffusion rules were particularly bad. The and and the issue, you do have this real challenge of controlling the flow of chips. What like they're very small and like they're, you know, it's just, it it it's not like quite trying to control software, but it's closer to that. Chips have always been close to software for lots of reasons.

• 6:11Ben Thompson?

  The actual production of them is relatively cheap. They're relatively small. All the cost is upfront, et cetera, et cetera, et cetera. So by and large, it's always been a challenge. So the AI diffusion rule was looking at the fact of the face that, look, we have a hard time controlling this. We're basically going to shift from a Fix problems after the fact or try to catch stuff to upfront. We're just going to require permission for everything. And the problem for that is kind of on the tin. Putting permission for everything is a great way to ensnarl the entire world in red tape. And it it's a great way to to limit innovation. It's a great way to open the door to other entities.

• 6:52Ben Thompson?

  Again, right now, China doesn't have enough chips to sell abroad, particularly their their sort of fastest ascend chips. They have lots of trailing edge chips that that are very trailing edge that are not really relevant to AI necessarily. But it's just in general, I think, a bad way to operate. And the other point, I mentioned it when I wrote about it at the time. But the access rules as set up by the Biden administration basically gated the world according to the US capacity to utilize chips. Because all these were all like ratios relative to how much was in the US. So there's ratios both of how much chips abroad needed to be controlled by US companies. And also how much was built in the US.

• 7:37Ben Thompson?

  And you were looking forward, you didn't need to look forward very many years, like single digit years, where the US is running out of power. We can't actually build more data centers or put in more chips. And we've now legally made it that that means the whole world is now gated on AI. And that that should fundamentally seemed a very sort of flawed way to think about AI and the AI opportunity. And the most generous interpretation of this deal is it addresses that directly. And you could be quite cynical about this and say, well, let's look at the US. You know, we we've the US, contrary to sort of conventional wisdom,

• 8:20Ben Thompson?

  has dramatically decreased its power usage. It's dramatically cleaned up its sort of environmental impacts and things along those lines. A lot of that is because we shipped all the stuff that people don't like abroad, right? And you know, this ties into all the trade stuff, all those bits and pieces. Well, you could certainly say that's what's I mean, I think I said this was generous. Maybe it's generous and cynical are sort of two sides of the same coin in this part. Uh, we've we're shipping abroad our inability to build to places where they have no compunction about getting stuff built.

• 8:52Andrew Sharp?

  All right, and that is the end of the free preview. If you'd like to hear more from Ben and I, there are links to subscribe in the show notes, or you can also go to sharptech.fm. Either option will get you access to a personalized feed that has all the shows we do every week, plus lots more great content from Strategery and the Strategery Plus bundle. Check it out, and if you've got feedback, please email us at [email protected].