xAI, Elon Musk’s artificial intelligence company, is reportedly in advanced negotiations to lease massive data center capacity in Saudi Arabia, as part of its efforts to expand infrastructure in regions offering low-cost energy and regulatory alignment.
The startup is in talks with two Saudi entities:
- Humain, a PIF-backed Saudi AI firm offering multi-gigawatt capacity.
- A second unnamed company, currently developing a 200MW facility that could be available in the near term.
According to Bloomberg and Reuters, Humain’s proposal remains a long-term plan, as the company has yet to start building much of the infrastructure it committed to. The unnamed second company, on the other hand, is already working on its facility, making it a practical near-term solution for xAI.
xAI aims to expand its compute capacity to train more advanced AI models, positioning itself to compete with ChatGPT from OpenAI and Claude from Anthropic. Its current data center in Memphis, Tennessee — known as Colossus — is considered one of the largest supercomputers globally.
The Saudi discussions may be tied to a previous investment in xAI, part of Prince Alwaleed bin Talal’s broader efforts to strengthen ties with Musk’s ventures. Technical and commercial efforts on the Humain side are reportedly led by Jeff Thomas and Saeed Al Dabbas.
xAI is not currently seeking new funding, having recently completed a $10 billion financing round split between equity and debt instruments, as stated by Musk on X.
Saudi Arabia is becoming increasingly strategic for AI infrastructure due to its sovereign capital, abundant energy resources, and a supportive regulatory climate. xAI is also exploring potential opportunities in the UAE, via conversations with Abu Dhabi’s G42, and in African countries with lower operational costs.
The Financial Times reported that xAI could be seeking a valuation between $170 billion and $200 billion. Infrastructure negotiations are led by Ross Nordeen, xAI’s co-founder and a former Tesla executive, while the technical operations are managed by Andrej Karpathy, also a former executive at Tesla and X.
This entire effort illustrates a broader shift: Saudi Arabia is not just investing in the AI future — it is actively building it.
