U.S. and Saudi Arabia Sign $142 Billion Arms Deal
On May 13, 2025, the United States and Saudi Arabia concluded a historic $142 billion arms deal, the largest defense cooperation agreement in U.S. history. Signed during a high-profile visit by former President Donald Trump to Riyadh, the agreement reflects increasing strategic cooperation between the two nations and covers the sale of sophisticated weapons and military systems aimed at enhancing Saudi Arabia’s defense capabilities.
The deal covers a broad spectrum of military equipment, such as air defense systems, coastal and border protection infrastructure, space technology, communications systems, and cybersecurity equipment. The aim is to improve the kingdom’s capacity to counter regional threats and modernize its military forces in line with changing global standards.
This weapons package is one component of a broader $600 billion investment deal between Saudi Arabia and the U.S., across industries like energy, artificial intelligence, infrastructure, and commercial aviation. Of particular note, DataVolt, based in Saudi Arabia, committed to investing $20 billion in AI centers based in the U.S., while U.S.-based tech giants Google and Oracle invested $80 billion in joint ventures.
Even with the size of the defense contract, U.S. defense shares like Lockheed Martin and Northrop Grumman declined, primarily on account of more general market worries over inflation and changing investor interest.
The $142 billion deal marks an important development in Saudi-US relations, placing Saudi Arabia at the core of defense and tech collaborations in the Middle East. It further points to America’s persistent role as an international arms exporter against the backdrop of geopolitical tensions and strategic readjustments.
