xAI is said to be exploring leasing options, attracted by the Middle East’s lower electricity costs and supportive political environment
In sum – what to know:
xAI considers Saudi data center expansion – Elon Musk’s AI firm is in talks to lease space in the Kingdom, citing low energy costs and a supportive regulatory environment.
Potential partners include Humain – One of the firms in discussion is Saudi-backed Humain, which aims to deploy 6.6GW of data center capacity over the next decade.
Building on U.S. infrastructure footprint – xAI already operates a data center in Memphis and is planning a second facility in the same city.
Elon Musk’s artificial intelligence company xAI is reportedly considering a new data center project in Saudi Arabia, according to a Bloomberg report.
The company, which has developed the Grok chatbot, has held talks with two prospective partners in the region, according to the report.
Rather than constructing its own facility, xAI is said to be exploring leasing options, attracted by the Middle East’s lower electricity costs and supportive political environment, it added.
One of the companies involved in discussions is Humain, an AI firm launched earlier this year with backing from Saudi Arabia’s Public Investment Fund (PIF). Humain has announced plans to build 6.6 gigawatts of data center capacity across the next 10 years.
The second potential partner was not identified in the report, but is described as having a 200MW data center currently under construction.
xAI already operates a data center in Memphis, Tennessee, and has plans for a second facility in the same city. In December 2024, xAI was intending to expand the size of its Colossus supercomputer in Memphis to 1 million GPUs, according to previous reports. Colossus launched last year, running a reported 100,000 Nvidia GPUs in a data center facility housed in a former Electrolux factory.
In May, Human said it was set to launch a $10 billion venture capital fund this summer, aiming to establish the Kingdom of Saudi Arabia as a central actor in the global AI field.
During a previous interview with the Financial Times, Humain’s Chairman Tareq Amin said that the fund, known as Humain Ventures, will target high-potential AI startups, enabling the Middle Eastern country to expand its influence in one of the fastest-growing sectors of the global economy. The initiative also aligns with the Kingdom’s Vision 2030 and supports goals set by the Saudi Data and Artificial Intelligence Authority.
Humain’s broader roadmap includes developing up to 1.9 gigawatts (GW) of AI-focused data center capacity by 2030, with plans to scale to 6.6 GW over the next four years. A 50 MW pilot site using 18,000 Nvidia GPUs is already in development and is expected to be operational next year.
“Humain is seeking to use Saudi Arabia’s financial might to gain a central role in almost every aspect of the burgeoning AI industry — from investing, infrastructure and chip design. That sprawling strategy is unmatched outside a handful of U.S. and Chinese big tech companies, which have had years, if not decades, to build their businesses and technical expertise,” the company said in a statement.
Humain has rapidly established ties with leading American firms, signing $23 billion worth of agreements with Nvidia, AMD, Amazon Web Services and Qualcomm. According to Amin, the full project cost could reach $77 billion based on current valuations.
As part of its industrial strategy, Humain is forming a $10 billion joint venture with AMD to deliver 500MW in AI compute capacity over five years. In a separate $2 billion partnership with Qualcomm, the company will build a chipset design center in Riyadh employing 500 engineers.
The company aims to handle 7% of global AI model training by 2030, focusing on both model development and inferencing capabilities.
