Musk’s xAI in Talks With Saudi-Backed Humain for Massive Data Center Deal

Musk's xAI in Talks with Saudi-Backed Human for Major Data Center Lease

Elon Musk's artificial intelligence startup, xAI, is engaging in early-stage discussions to lease significant data center capacity in Saudi Arabia, focusing on partnerships that offer access to cheap energy and supportive geopolitical environments.

 The primary talks involve Humain, a Saudi-backed AI firm established under the kingdom's Public Investment Fund (PIF), which is proposing several gigawatts of computing power for long-term use.

 Additionally, xAI is negotiating with an unnamed partner for a more immediate 200-megawatt facility to address short-term needs.

 This move aligns with xAI's aggressive expansion strategy, amid a global race for AI infrastructure where demand for high-power data centers has surged due to energy-intensive training of large language models.

Key Details of the Potential Deal

• Capacity and Timeline: Humans offers targets for multi-gigawatt-scale projects, which could take years to fully operationalize, as the firm has yet to break ground on much of its pledged infrastructure.
  The alternative 200MW option provides quicker deployment, potentially bridging xAI's immediate compute requirements.

• Strategic Motivations: xAI is prioritizing regions with low-cost energy to reduce operational expenses, which are critical for powering massive GPU clusters. xAI already operates around 200,000 GPUs and plans for up to 1 million in new facilities.
  Saudi Arabia's abundant energy resources and PIF's investments in AI make it an attractive hub, part of the kingdom's push into "Sovereign AI" initiatives.

• Broader Explorations: Beyond Saudi Arabia, xAI has considered deals in the United Arab Emirates (UAE) with G42 (Group 42 Holding Ltd), an Emirati AI company, and even sites in Africa for similar low-energy-cost advantages.

 These efforts complement xAI's U.S.-based projects, including a new data center in Memphis, Tennessee, where it recently secured permits for 15 gas turbines and plans to import an overseas power plant for up to 2 gigawatts of power.

Background on xAI and Human

xAI, founded by Musk in 2023, aims to "understand the true nature of the universe" through advanced AI models like Grok, and has raised significant funding, including a $5 billion round supported by Morgan Stanley.

 The company is rapidly scaling its compute resources to compete with rivals like OpenAI, with recent successes in models like Grok 4.

 Humain, backed by Saudi Arabia's PIF, is positioning itself as a key player in AI infrastructure. It offers cloud services and data centers to attract global tech firms amid the kingdom's Vision 2030 diversification efforts.

 This potential partnership reflects growing Middle Eastern investments in AI, with projections for the global AI data center market reaching $563 billion by 2028.

Market and X Reactions

The news, first reported by Bloomberg on July 16, 2025, has sparked interest in AI infrastructure stocks, with analysts noting potential revenue boosts for companies like NVIDIA (estimated $40-50 billion per gigawatt).

 On X, users highlighted the strategic implications, with posts praising Musk's "gigachad" approach to securing compute and speculating on xAI's edge in the AI race.

 Reactions ranged from optimism about xAI's expansion to discussions on sovereign AI trends, with some users sharing visuals of the reported deals.

As talks progress, this could mark a pivotal step in xAI's global footprint, though challenges like construction delays remain.

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