AI Chips Are The New "Coin Of The Realm," Says BofA

AI chips are now so strategically important that they are being likened to a form of currency in global trade and geopolitical negotiations, according to analysts at Bank of America (BofA).

“Sovereign AI” deals could eventually account for more than $50 billion annually in what BofA estimates is a $450 billion to $500 billion global AI infrastructure market.

The comment follows a flurry of mega-deals that underscore the growing demand for AI computing infrastructure, Jason Ma reported for Fortune Tech.

In a recent note, BofA estimated that AI infrastructure projects involving Nvidia, AMD, and Humain—a subsidiary of Saudi Arabia’s Public Investment Fund—could amount to $3 billion to $5 billion in annual investments, or $15 billion to $20 billion over several years.

These “sovereign AI” deals could eventually account for more than $50 billion annually in what BofA estimates is a $450 billion to $500 billion global AI infrastructure market.

“Sovereign AI could also help address limited power availability for data centers in the U.S., while offsetting headwinds caused by export restrictions on U.S. tech to China,” the analysts added.

While Nvidia and AMD are seen as the primary beneficiaries of the Saudi project, others such as Broadcom, Marvell Technology, and optical connectivity provider Coherent are also expected to gain.

AI demand from hyperscalers remains strong, diffusion rules have been eased, and the GPU is now “the new coin of the realm,” BofA wrote.