Trump’s Nvidia Deal Turns Armenia Into Surprising AI Hotspot

(Bloomberg) -- During the Cold War, the Soviet Union's smallest republic was an electronics and tech center for the Communist superpower. Now Armenia is on track to become one of the world's top hubs for American AI infrastructure.

In August, a San Francisco-based startup called Firebird began operations of a data center in Armenia that's set to reach 300 megawatts and more than 70,000 cutting-edge Nvidia Corp. chips by the end of next year. A fifth of its computing power is reserved for domestic use — to power local research, government and startup ecosystems — with the remainder allocated to foreign firms, including US ones like Perplexity AI.

The complex in the town of Hrazdan, about 45 kilometers (28 miles) outside the capital Yerevan, is on track to be the largest computing cluster in the region and would rank among the largest in Europe, says Firebird, whose founders are of Armenian descent. That's an economic edge with far-reaching implications for the South Caucasus and neighboring Central Asia, where Firebird is already expanding and where major powers are competing for dominance in a strategic corridor that links Europe and China bypassing Russia.

The data center already played a role in securing a peace treaty between Armenia and neighboring Azerbaijan after decades of conflict over a disputed territory that killed tens of thousands and severed their economic relations. President Donald Trump's team promised permission for Nvidia exports in order to advance conversations with Armenia on the way to a historic US-brokered accord with Azerbaijan, according to people involved in the talks.

The role of Nvidia chips in that deal, first reported by the Wall Street Journal, is one of the more extraordinary examples of Trump's unorthodox approach to AI diplomacy. It shows how Trump's team utilizes certain chip export regulations introduced under the Joe Biden administration, while criticizing their predecessors' broader approach, to achieve goals that extend far beyond technology.

It also underscores the ambitions of a small nation of about 3 million people that's attempting to carve out a role at the heart of the fast-changing region — and how years of work by Yerevan to lay the foundation for tech investment and assuage US concerns about Russian influence are starting to pay off in the AI age.