Elon Musk’s AI startup, xAI, is making bold moves to expand its infrastructure, and Saudi Arabia is emerging as a core part of that strategy. The company is reportedly in advanced talks to lease massive data center capacity in the Kingdom, aligning with its push for affordable energy, scalable infrastructure, and regulatory support.
Strategic Talks with Two Saudi Players
xAI is negotiating with two major Saudi entities:
- Humain – A Public Investment Fund (PIF)-backed AI company with plans to offer multi-gigawatt data center capacity
- An Unnamed Developer – Currently building a 200MW facility, which may come online in the near term
While Humain’s proposal is ambitious, the infrastructure is still largely under development. The unnamed company, however, offers a more immediate solution, as its facility is already under construction.
Why Saudi Arabia?
Saudi Arabia is fast becoming a top destination for AI infrastructure, and for good reason:
- Abundant low-cost energy
- Massive sovereign wealth capital
- Pro-innovation regulations
- Political will to become a global tech leader
For xAI, this means faster scaling and lower operational costs, two essentials for training next-generation AI models.
The Bigger Picture: xAI’s AI Arms Race
xAI’s goal is to compete directly with giants like OpenAI’s ChatGPT and Anthropic’s Claude. Its existing compute base, including the Colossus supercomputer in Memphis, is already among the largest globally. But training ever-larger models requires even more powerful infrastructure.
The Saudi move is a natural next step.
- Expanding compute power to handle more advanced AI workloads
- Leveraging international partnerships for long-term scalability
- Positioning xAI globally beyond its current U.S. base
Key Players Behind the Deal
The technical and commercial side of the talks with Humain is reportedly being led by:
- Jeff Thomas
- Saeed Al Dabbas
Meanwhile, xAI’s infrastructure negotiations are spearheaded by:
- Ross Nordeen – xAI co-founder and former Tesla executive
- Andrej Karpathy – Head of technical operations, also a former Tesla and X (formerly Twitter) leader
These industry veterans are driving one of the most ambitious global AI infrastructure expansions to date.
Funding and Valuation
xAI isn’t looking for more funding at the moment. Elon Musk recently confirmed that the company completed a $10 billion funding round, split between equity and debt. However, market analysts expect xAI’s valuation could soon reach $170–$200 billion, according to Financial Times reports.
Beyond Saudi Arabia
xAI isn’t stopping at Saudi Arabia. It’s also exploring:
- The UAE, via conversations with Abu Dhabi’s G42
- Select African markets, where energy and infrastructure costs are even lower
Final Thought
This isn’t just about leasing data centers, it’s about redrawing the global AI map. With Elon Musk at the helm, xAI is placing Saudi Arabia at the center of a bold new era in AI. The Kingdom isn’t just participating in the future of AI, it’s helping build it.