The Trump Administration’s Entanglements With Saudi Arabia
Trump administration economic projects like its big AI build-out involve billions of dollars in investments from the Saudi Arabian government. The committee that’s supposed to oversee the deals is stacked with officials with business ties to the Saudis.
Donald Trump shakes hands with Saudi Arabia's Crown Prince Mohammed bin Salman in the Oval Office of the White House on March 20, 2018, in Washington, DC. (Mandel Ngan / AFP via Getty Images)
President Donald Trump is laying the groundwork for more than a trillion dollars in investments into the United States’ economy and more than half of that is coming from the authoritarian Saudi Arabian government, resurfacing long-standing ethical and national security concerns.
But the top federal committee tasked with evaluating these business transactions is now stacked with Saudi-connected officials, and a global law firm just concluded the powerful oversight committee “may be less wary of investments from Saudi Arabia” than it was in the past.
The massive investments stem from two announcements from Trump during his first week in office. On January 21, the president announced Project Stargate, a $500 billion plan involving three companies with Saudi connections to build artificial intelligence data centers, with the first center to be constructed in Texas. Two days later, Saudi Arabia announced that it would be investing $600 billion in US trade, companies, and products over the next four years.
Human rights groups and lawmakers have expressed concerns about US interests becoming entangled with Saudi Arabia’s Public Investment Fund, the state-owned investment firm overseen by Saudi Crown Prince Mohammed bin Salman, who reportedly helped plan the 2018 murder of Washington Post reporter Jamal Khashoggi.
Human Rights Watch, a nongovernmental organization dedicated to protecting human rights worldwide, has urged the Committee on Foreign Investments in the United States (CFIUS) — a Treasury Department subcommittee tasked with approving foreign investments into US companies — to strengthen its oversight of such deals with Saudi Arabia and other countries embroiled in human rights violations.
Trump, who has multiple business connections to the Middle East nation, has stacked the nine-member subcommittee with four members who have prior business connections to the Saudi government and Saudi businesses. Another committee member is invested in nearly three dozen AI companies.
Three days before Trump’s inauguration, the global law firm Perkins Coie released an analysis of international trade and national security matters related to the new administration that noted “CFIUS may be less wary of investments from Saudi Arabia — with which President-elect Trump has enjoyed warm relations.”
Richard Painter, a former White House ethics lawyer and current law professor at the University of Minnesota, thinks CFIUS members’ financial ties to the international deals they’re supposed to be supervising will be par for the course for the new Trump White House.
“Conflicts of interest are going to be pervasive in this administration,” Painter told us:
You’ve got a bunch of people [invested] in crypto that are supposed to be regulating crypto. You’ve got social media [companies] with the president and Elon Musk. I’m not surprised that we’re going to have a committee on foreign investments that’s stacked up with millionaires or very wealthy people doing a lot of deals overseas themselves.
Bin Salman’s Saudi investment fund has a multibillion-dollar partnership with SoftBank, one of the contractors for Project Stargate, Trump’s “AI moonshot” to build $500 billion worth of data centers, power plants and electric lines to power resource-hungry computer systems. deal. OpenAI, a leading US-based artificial intelligence company and another Stargate company, has Saudi investors, and tech giant Oracle, the third company involved in the deal, is building a $1.5 billion tech facility in Saudi Arabia.
The new deals come during a pivotal time for the artificial intelligence industry.
Since the Stargate deal was announced, DeepSeek, a Chinese AI company, has announced that its own artificial intelligence technology rivals and outperforms US technology at a fraction of the cost. The release of the Chinese software has caused widespread volatility in the tech sector, causing tech stocks to plummet. Shares for Nvidia, the leading US-based chipmaker, also dropped by 17 percent on Monday, resulting in a $600 billion market cap loss, the largest drop ever for a US company.
Amid the upheaval, the Trump White House is pushing to expand AI’s reach and remove guardrails. On his first day in office, Trump rescinded a Biden executive order requiring AI companies to submit safety tests and other information to the government to reduce risks to workers, consumers, and national security.
“AI seems to be very hot,” Trump said during the Stargate announcement. “It seems to be the thing that a lot of smart people are looking at very strongly, and our country will be prospering like never before. It is going to be the golden age of America.”
The Microsoft-backed company OpenAI has also announced ChatGPT Gov, a new product that will allow the government to feed “nonpublic, sensitive information” into its AI programs.
The Saudi connections on the Treasury Department’s foreign investment committee isn’t the only development complicating the oversight of such deals. On January 24, Trump fired eighteen inspectors general, federal officials tasked with investigating fraud, abuse, and ethics concerns related to conflicts of interest. The move counters Trump’s and Musk’s promises to root out fraud and mismanagement of funds, said John Pelissero, a government ethics expert at Santa Clara University.
“Without a strong presence of inspectors generals in each of the agencies, it’s been very difficult for the Office of Government Ethics, which itself may be subject to a reduction of force, to carry out their duties,” Pelissero told us.
“A Powerful Tool for Saudi Soft Power and Influence”
Trump has selected three companies to deliver his $500 billion Stargate plan: OpenAI, the leading artificial intelligence company in the United States; Oracle, a corporation that offers payroll and other tech services; and SoftBank, a Japan-based tech investment firm. All three have business ties to Saudi Arabia.
OpenAI received a $5 million investment from Al Moammar Information Systems, one of Saudi Arabia’s largest tech companies, in January 2024. The year before, Al Moammar signed a $25.7 million contract with the Saudi-owned Public Investment Fund for various digital installation projects. The new Stargate deal also comes amid a tense relationship between OpenAI and Microsoft, the software giant that poured $13 billion into OpenAI early on and provides nearly all of OpenAI’s computing power.
SoftBank partnered with Saudi Arabia’s Public Investment Fund in 2016: the sovereign wealth fund partnered with the company by investing $45 billion to create a $100 billion fund to invest in a variety of companies. Last year, SoftBank teamed up with another Saudi government–backed investment firm to invest in Dahua Technology, a Chinese surveillance equipment company. The new AI deal could be a much-needed boon for SoftBank; the firm’s Saudi-backed investment fund reported more than $15 billion in losses for 2022.
SoftBank is also reportedly investing up to $25 billion into OpenAI as part of a new funding drive for the AI company.
Oracle, meanwhile, announced in 2023 that it would spend $1.5 billion to expand cloud computing centers in Saudi Arabia.
Additionally, the Saudi government announced in November that it plans to invest up to $100 billion in data centers, AI companies, and other initiatives to entice tech companies to set up headquarters in the country and invest in Saudi companies.
The country’s Public Investment Fund, one of the world’s largest sovereign wealth funds with nearly $1 trillion in assets, recently came under fire from US lawmakers.
Last February, the Senate Committee on Homeland Security criticized multiple US-based consulting firms — including McKinsey & Company and the Boston Consulting Group — for refusing to hand over information about their work with the investment fund. The Senate subpoenaed the consulting firms for documents related to their work in November 2023, but a Saudi court ordered the firms not to hand over the information, citing confidential business secrets.
“The position that I’ve heard expressed today is essentially that you will comply with the subpoena, but only so far as Saudi Arabia allows you to do so,” said Sen. Richard Blumenthal (D-CT) during the hearing. “You say that you’re [between] a rock and a hard place, but you’ve chosen sides. You’ve chosen the Saudi side, not the American side.”
The Public Investment Fund is also linked to a number of human rights violations, according to a November 2024 report by Human Rights Watch. The international human rights group found evidence that Saudi agents used an airline owned by the Saudi investment fund to fly to Istanbul in 2018 to kill Khashoggi, the Washington Post reporter.
What’s more, according to Human Rights Watch, one of Bin Salman’s top advisors ordered the Public Investment Fund’s supervisor to seize twenty companies and transfer the ownership into the investment fund during an anti-corruption campaign, allegedly without any sort of court proceedings. The nonprofit’s report also claimed the investment fund financed projects in parts of Saudi Arabia where human rights violations are allegedly taking place, such as massive land seizures and forced evictions of native communities.
But CFIUS has not been evaluating the investment fund’s US deals, noted Human Rights Watch, despite the allegations of human rights abuses.
“PIF investments do not now trigger a review by the Committee on Foreign Investment in the United States,” the report states. “The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which ‘strengthens and modernizes CFIUS,’ did not include human rights concerns as part of the CFIUS review process.”
The Human Rights Watch report recommended that CFIUS more deeply scrutinize business transactions with foreign entities connected to alleged human rights violations and urged the committee to label Saudi Arabia as a country of concern.
The human rights group also issued a warning about the Saudi government using its investment funds to influence other countries.
“[Public Investment Fund] investments in the United States, the U.K., and elsewhere in the world also serve a powerful tool for Saudi soft power and influence,” the report states. “These investments are a cornerstone of Saudi Arabia’s influence operations abroad, which seek to garner uncritical foreign support for Mohammed bin Salman’s agenda, spread disinformation about the country’s rights record, neutralize scrutiny, silence critics, and undermine institutions seeking transparency and accountability.”
The Saudi Connection
The United States is the world’s largest recipient of foreign investments — which means the government committee overseeing these deals has enormous power.
CFIUS, which makes recommendations on the subject to the president, is chaired by the secretary of the Treasury; the secretaries of state, defense, homeland security, commerce, and energy, as well as the US attorney general, the US trade representative, and the director of the Office of Science and Technology Policy round out the board.
The committee considers the potential national security risks of foreign investments in the US economy and approves mergers, takeovers, and other matters involving foreign businesses. The president has the authority to block deals based on national security concerns stemming from the committee’s recommendations.
Four of CFIUS’s members have business ties to Saudi Arabia. That includes the board’s chair, Treasury secretary Scott Bessent. In the mid-1980s, Bessent was a junior trader for the Olayan Group, a private equity and real estate firm owned by a prominent Saudi family.
Another subcommittee member — Pete Hegseth, Trump’s new defense secretary — recently worked with Norman Coleman, a former Republican senator from Minnesota who lobbied for the Royal Embassy of Saudi Arabia in 2020. Coleman was reportedly Hegseth’s “sherpa” in Congress during his recent confirmation process. Coleman also worked on behalf of the Saudi government in 2017 and 2018, providing “strategic and legal advice on general foreign policy related issues,” among other actions, according to disclosures.
Coleman is currently senior counsel for Hogan Lovells, a global corporate law firm that provided legal services to the Royal Embassy of Saudi Arabia in 2024, according to Foreign Agent Registration documents reviewed by us. In 2023, the law firm conducted public relations work for two female Saudi astronauts.
Recently confirmed US attorney general Pam Bondi, meanwhile, previously worked for Ballard Partners, a Trump-connected lobbying firm that conducts lobbying work in Saudi Arabia. A fourth CFIUS member, US trade representative Jamieson Greer, previously lobbied Congress on behalf of WebuildUS, a subsidiary of an Italian construction company that is working on the Neom project, a Saudi initiative to build a massive city on the Red Sea.
These Saudi ties aren’t the only potential conflicts of interest related to CFIUS’s oversight of Trump’s new international business deals. A fifth subcommittee member, Trump’s commerce secretary Howard Lutnick, is invested in more than thirty companies involved in artificial intelligence research and products, according to financial disclosures reviewed by the Lever.
“He’s gonna have to divest from a bunch of those companies in order to do his job, including being on the [foreign investment] committee, because artificial intelligence is an area where we may very well have foreign government investment in the United States that could compete with his companies,” Painter said. “If he keeps any interest in those companies, he’s got to recuse [himself from] the entire artificial intelligence sector of the economy, which is huge.”
Lutnick is the former CEO of financial firm Cantor Fitzgerald, which lost more than 650 employees during the September 11, 2001 terrorist attack. In 2004, Cantor Fitzgerald sued the Saudi government alleging that the nation funded the 9/11 hijackers and al-Qaeda. The suit was dismissed in 2005.
According to Pelissero at Santa Clara University, the conflicts of interest within the new Trump administration are unique because there has been much less vetting of Trump’s cabinet nominations and their prior employment than the scrutinization of previous administrations.
“There are so many people from the financial world, the tech world, and billionaires who, because of their wealth and their prior roles, have enormous investments and have a lot at stake personally and financially in their investments,” Pelissero said. “To the extent that they’re tied up with the Saudis, or any other entity and interest like cryptocurrency or technology, it’s going to complicate their ability to demonstrate to the public that they’re looking out for what’s best for the common good, and not for things that they themselves might benefit from.”
“Clearly Warrant Greater Scrutiny”
Since 1990, presidents have prohibited eight business transactions based on CFIUS recommendations, according to a December 9, 2024 report by the Congressional Research Service, a nonpartisan government research agency.
This includes a Trump prohibition: during his first administration, Trump used a CFIUS determination to order TikTok’s parent company ByteDance to divest from a social media company called musical.ly; the two firm’s merger had led to the 2017 creation of TikTok.
President Joe Biden also relied on CFIUS rulings to stop business dealings. In 2023, the Biden administration reportedly used a CFIUS determination to force a Saudi-backed company to divest from an AI company developing computer chips that mimic the brain. Altman, CEO of OpenAI, has invested in the computer chip company.
The most recent CFIUS-related prohibited transaction came in 2024, when Biden ordered a Chinese government–owned crypto mining firm to sell off its real estate near a US missile base.
In recent years, CFIUS has been criticized for its seemingly soft stance on Saudi initiatives.
In 2023, Rep. Ayanna Pressley (D-MA) urged a Biden CFIUS member to take a harder stance on Saudi investments in core US companies.
“Saudi Arabia . . . has more than $35 billion [invested] in American companies like Amazon, Walmart, rideshare and the food delivery company Uber Technologies, as well as the major ticketing platform Live Nation Entertainment,” Pressley said during a House Financial Services Committee meeting. “Saudi investments in U.S. companies, especially those in critical or sensitive industries, clearly warrant greater scrutiny.”
Pressley also claimed that Saudi Arabia was using its golf tour — LIV Golf, which is currently trying to merge with the US-based Professional Golfers’ Association — to “sportswash” its alleged human rights violations in Yemen, where it’s been accused of using US-made weapons to bomb civilian areas and other parts of the Middle East.
Trump hosted multiple LIV Golf events at his various properties in 2023.
Since the 2024 election, the Saudi sovereign wealth fund has been working to influence US opinions.
Two days after Trump’s victory, the Public Investment Fund agreed to pay the New York–based public relations Prosek LLC more than $2.7 million to work for the fund’s corporate affairs department. The arrangement included “corporate communications support (including content development and media relations), sports sponsorships advisory, and on-ground events support,” according to disclosures reviewed by the Lever.
Then on January 16, FGS Global, a New York–based communications and public relations firm, filed documents to work with the Public Investment Fund on “message testing to determine audience attitudes on issues pertaining to sports and entertainment,” for which it will be paid $187,500 for their work, disclosures show.