Deteriorating conditions in Sudan, AI boom propels Nvidia and Saudi's sports ambitions
August 2023
Hello and welcome!👋
The world went on a rollercoaster ride in August. There were highs (e.g. India’s south pole moon landing, economic stimulus created by Taylor Swift) and lows (dangerous wildfires in Hawaii and Greece, fallout from Niger’s coup), coupled with moments of disbelief (Yevgeny Prigozhin’s sudden death in a plane crash).
This edition will delve into Sudan’s ongoing tragedy and the political ramifications, how investment in AI is fortifying chipmaker Nvidia, and why Saudi Arabia wants sports to be a pillar of its economy.
As always, your likes and comments are much appreciated.
SPIRALLING CRISIS IN SUDAN
Sudan is on the cusp of a devastating civil war as fighting spreads across the country, warns the United Nations. The conflict, which erupted on 15 April, is approaching the five month mark. Yet Sudan’s plight has dipped out of the headlines.
To recap: The East African nation is trapped in a power grab between General Abdel Fattah al-Burhan, Sudan’s army chief, and Mohamed Hamdan Daglo, who commands the paramilitary Rapid Support Forces (RSF). Both men cooperated to remove dictator Omar al-Bashir in 2019, but personal rivalry eventually drove them apart.
The UN says Sudan is experiencing a humanitarian emergency impacting millions of people, while the US State Department has condemned pervasive conflict-related sexual violence.
Unfortunately, the likelihood of a ceasefire is extremely low. Sudan’s strategic location and vast natural resources mean several stakeholders are involved (GZERO Media and the Council on Foreign Relations explain the regional dynamics). The International Crisis Group holds the view that Sudan’s future will be shaped by parties outside of its borders.
AI ADOPTION FUELS NVIDIA’S GROWTH
The corporate earnings season ended with a bang when Nvidia delivered second-quarter results that blew past expectations.
Wall Street analysts had estimated revenue of US$11 billion for the May to July period - instead the semiconductor firm made a whopping $13.5 billion. What’s more, Nvidia predicts it can book sales of $16 billion between August and October. Those numbers have pushed the company’s stock price even higher, giving Nvidia a market cap of around $1.15 trillion. [For context, Amazon’s value is $1.37 trillion.]
Considering the glut of microchips (ask Samsung about oversupply), why are investors so excited about this particular chipmaker? Well, Nvidia is now a vehicle for the artificial intelligence boom. Its brand of graphics-processing units have become the tool of choice for training AI systems in data centres.
“A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,” said Nvidia founder and CEO, Jensen Huang. Fortunately for Huang, rivals like Intel and AMD will take time to catch up to Nvidia’s capabilities.
A major concern, though, is US-China friction over technology transfers. Chinese customers are racing to purchase and stockpile AI-related chips in case Washington introduces further export curbs. Nvidia’s chiefs say tougher restrictions would risk a “permanent loss” for American semiconductor firms to lead in one of the world’s largest markets.
SPLURGING ON SPORTS
Saudi Arabia is spending billions of petrodollars on sports. The sums of money are so huge that the kingdom will not only revamp its cultural and business portfolios, but also the global sports industry.
From boxing to football, Riyadh is determined to own a slice of the action, seemingly at any cost. Just look at the furore over the PGA Tour’s merger with Saudi-backed golf venture LIV.
Government ministers are writing cheques with permission from Crown Prince Mohammed bin Salman, who wants to diversify the country’s oil-reliant economy and nurture a range of sectors. The initiative is known as Vision 2030.
The thinking goes: Offering US$200 million to Cristiano Ronaldo, for example, could spur ticket and merchandise sales, entice overseas fans to come visit, improve stadium facilities, attract TV licensing deals, and perhaps encourage fitness among local residents.
“In a turbulent world many fans see their teams as a source of pride and stability. But many forget that sport is also a business that is being disrupted. It needs to be open to new capital and fresh ideas,” notes The Economist.
“The kingdom views sport as a way to reinvest oil revenues and catalyse reform at home by creating a bigger services industry and boosting tourism…The spread of a globalised, consumerist, sporting culture may help Saudi Arabia shift social norms away from austere religious conservatism.”
On the other hand, critics accuse Saudi Arabia of “sportswashing” its reputation, i.e. trying to gain legitimacy and alter public perceptions through sporting events such as Formula 1 races or WWE matches.
Human Rights Watch says “due diligence and transparent processes are urgently needed for purchases and mergers that clearly have human rights implications.”
Thanks for reading! Take care and stay curious, Sara x