Core Viewpoint - Bank of America expresses optimism towards chip stocks like Nvidia (NVDA.US), viewing AI chips as "new currency" that plays a crucial role in geopolitical negotiations and highlighting the long-term demand for AI computing in recent large-scale projects in the Middle East [1][2] Group 1: AI Chip Market Dynamics - The demand for AI computing capabilities continues, with significant investments projected in AI infrastructure projects, particularly in collaboration with Saudi Arabia's Public Investment Fund (PIF), estimated to reach $3 billion to $5 billion annually, potentially totaling $15 billion to $20 billion in the coming years [2] - Nvidia is set to supply 18,000 advanced Blackwell chips to the newly established company Humain, while AMD has signed a $10 billion agreement to provide 500 megawatts of AI computing power for Humain's data centers [2] Group 2: Investment Opportunities - Bank of America identifies Nvidia and AMD as likely major beneficiaries of the Saudi project, raising their target stock prices to $160 and $130 respectively [3] - Other chip stocks such as Broadcom (AVGO.US) and Marvell Technology (MRVL.US), along with optical connectivity provider Coherent (COHR.US), are also expected to benefit, with buy ratings reiterated for these companies [3] Group 3: Market Trends and Regulations - Capital expenditures from hyperscale/cloud customers have increased by 44% year-over-year, compared to just 7% in the previous year, indicating a robust demand for AI infrastructure [3] - The easing of regulations that previously restricted the diffusion of AI technology is expected to further drive the demand for advanced AI chips, as the Biden administration's prior licensing regime limited access to these technologies [3] - AI chips are becoming pivotal in geopolitical trade negotiations, functioning as a new form of "currency" in these discussions [3]

Core Insights - The "Stargate" project, driven by OpenAI, Oracle, and SoftBank, is facing significant challenges in funding and progress, with a planned investment of $500 billion by 2029 for AI infrastructure in the U.S. [1][2] - The project is compared to the Manhattan Project, but it requires market monetization for sustainable returns, which is hindered by rising costs and geopolitical tensions [2][3] Group 1: Project Challenges - The U.S. tariffs have significantly increased the construction costs of AI projects, with data center costs rising by 5% to 15% due to steel and aluminum tariffs [1] - Uncertainty surrounding future tariff measures complicates decision-making for companies involved in the project, affecting financing conditions in global capital markets [1][2] Group 2: Global Market Dynamics - The "Stargate" project aims to tap into both domestic and international markets, but rising protectionism and tariff disputes may lead other countries to retaliate against the U.S. tech industry, particularly in AI [2][3] - The development model of the AI industry differs from that of nuclear and space technologies, as the rapid evolution of AI technology has led to multiple shifts in its development trajectory, making it harder to ensure a leading position through scale alone [2][3] Group 3: International Cooperation - The trend towards international cooperation in AI development is evident, as the "Stargate" project requires global talent mobility and ecosystem building to address cost and budget challenges [4] - OpenAI is planning to expand the "Stargate" project beyond the U.S., indicating a shift towards more traditional international collaboration despite ideological differences [4]