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NVIDIA Corp (NASDAQ:NVDA) GPUs are no longer just powering generative AI—they’ve become geopolitical bargaining chips.
The U.S. government just proved it by giving Armenia access to its most advanced chips, something most countries are vying for.
San Francisco-based startup Firebird AI received approval this week to export 6,144 Blackwell GPUs to Armenia, providing enough computing power to build the region’s first large-scale AI factory.
Armenia and the U.S. signed a Memorandum of Understanding in August expressing mutual interest in semiconductor investment, setting the stage for this week’s approval.
The approval places Armenia alongside Saudi Arabia and the UAE as one of the few nations to secure U.S. clearance for advanced AI hardware in 2025. Unlike the wealthy Gulf states, whose AI initiatives are state-funded, Armenia’s tech industry grew from a grassroots movement, driven by its recent conflict with Azerbaijan, startup ambitions, and its global diaspora network.
The expansion of GPU exports to Armenia marks a significant shift in U.S. export policy. The U.S. is now willing to grant Tier 2 countries, nations that aren’t formal military allies, access to AI technology if they align with American strategic interests.
“This is a paramount moment for Armenia’s high-tech industry. The new AI Factory will have an impact in a most profound way not only on Armenia but also on neighboring countries,” said Sergei Shestakov, CEO and Founder of MPP Insights, a data engineering and analytics consulting firm based in Richmond, Virginia, with an R&D office in Armenia.
“This deal also signifies a new level of cooperation between the Republic of Armenia, with its creative startup scene, and the United States, the world leader in AI Infrastructure,” said Shestakov.
Armenia has met every criterion to enable this deal. The country has pivoted West by signing a Trump-brokered peace deal with Azerbaijan and committing to the proposed Trump Route for International Peace and Prosperity (TRIPP) trade corridor linking Azerbaijan with its exclave, Nakhchivan. And its location between Russia and Iran makes it geopolitically valuable, a position further amplified by its influential U.S. diaspora.
“There is great demand for these factories everywhere in the world, and we will have one in Armenia, which is a remarkable thing for a small country of three million to be one of the first in the world to have one,” said Rev Lebaredian, NVIDIA VP of Omniverse and simulation technology, at Digitec Expo in Yerevan. “Building AI factories alone is a multi-trillion-dollar industry, and those who know how to build and operate AI factories have an advantage over everyone else.”
The $500 Million Bet
NVIDIA first announced its strategic collaboration with Firebird and Armenia in June as a $500 million public-private partnership to build the region’s most powerful supercomputing hub. Phase 1 will develop a 100-megawatt facility using Dell Technologies Inc (NYSE:DELL) servers and NVIDIA’s B200 GPUs. Once complete, Armenia will be roughly on par with the United Kingdom in terms of AI computing power.
“Receiving permission to export NVIDIA GPUs to Armenia was the cornerstone of this project, so now we have the full green light and are in execution mode to build this data center and make it live by Q2 next year,” Firebird AI Co-Founder Alexsandr Yesayan told Benzinga.
The project will allocate 80% of its computing power to U.S.-based firms operating in the region and 20% to domestic companies.
Armenia is emerging as a perfect test case for AI factory infrastructure. Closed borders with Turkey and Azerbaijan have severely constrained the country’s export capacity, but AI enables the digital export of excess electricity. Armenia has billions in unused Soviet-era energy infrastructure that can power the facility, according to Yesayan.
“While Armenia can produce the energy, given its current situation, it does not have the physical infrastructure to export it through built lines,” Yesayan explained.
“Through GPUs, you can transfer electricity through the internet and sell it anywhere,” Yesayan said.
Yesayan says the border needs to be open for physical trade. Still, they are exploring an alternative route, recognizing that the future wave of exports will be through electricity via AI tokens, potentially providing a new high-value export for Armenia and other nations.
“This is a U.S. company doing a project in Armenia, which is our initial phase. Then, we want to replicate this in other countries.”
How Armenia Got Here
On paper, Armenia is an unlikely candidate compared to wealthy Gulf states competing for GPU exports. This collaboration was the culmination of a multi-year relationship built on strategic timing, geopolitical shifts, and Armenia’s positioning as a growing tech hub.
Armenia’s connection to NVIDIA dates back to 2019, when Prime Minister Nikol Pashinyan became the first head of state to visit the company’s headquarters, when it was not the world’s most valuable company.
“It just so happens that the Armenian Prime Minister is the first head of state to come to NVIDIA,” said Lebaredian.
“Now they are all lining up.”
NVIDIA established its presence in 2022 by relocating its Russian office to Yerevan, led by Lebaredian, following the invasion of Ukraine.
CEO Jensen Huang made a reciprocal visit to Armenia in 2023, meeting with Pashinyan to discuss the partnership, laying the foundation for the approval seen this week.
The New Playbook
While the deal is comparably small compared to the proposed AI factory deals in Saudi Arabia and the UAE, the agreements signal a shift in American diplomatic priorities that supersedes sheer size.
“This investment compresses years of Armenia’s development into a single step forward. When the U.S. places high-end NVIDIA GPUs in a small, but tech-savvy country, it’s building a long-term bridge. This is America’s answer to the Belt and Road Initiative,” said Peter Bilzerian, data engineering executive and investor focused on Armenia’s AI emerging ecosystem.
“Compute access is the new soft power. With real GPU capacity, Armenia can move from simple software to owning the full data pipeline, from ingestion to model deployment, making Armenia one of the most powerful data engineering hubs.”
Photo Courtesy of Firebird AI.
Disclosure: The author has no business relationship with any of the companies mentioned in this article and holds no position in any of the stocks mentioned. UATE provided the author’s travel to Armenia to attend Digitec Tech Expo. All reporting and opinions remain independent.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
