Saudi Arabia’s state-backed artificial intelligence company, Humain, said on Wednesday that it had invested $3 billion in Elon Musk’s xAI, deepening the country’s financial ties with the tech billionaire.
Humain, the Riyadh-based A.I. company created last year by Crown Prince Mohammed bin Salman, said it made the investment just before Mr. Musk announced that he had combined xAI with his rocket company, SpaceX, creating a business worth more than $1 trillion.
Humain’s investment made it “a significant minority shareholder in xAI, with its holdings subsequently converted into shares in SpaceX,” the Saudi company said in a statement.
The timing of the investment could produce a financial windfall for the Saudi firm. Mr. Musk is said to be planning an initial public offering of the combined company later this year.
The deal gives Saudi Arabia a stake in a key American government contractor. SpaceX, the world’s largest rocket maker, plays an important role in U.S. national security systems by launching military and intelligence satellites. The company also operates Starlink, the biggest satellite internet provider, whose technology has been critical for Ukraine’s military defences.
Mr. Musk has been forging closer ties to Saudi Arabia as he competes against companies like OpenAI, Google, and Anthropic in the race to build A.I. applications and infrastructure. Last year, xAI announced plans to build a major A.I. data center with Humain in Saudi Arabia.
Prince Mohammed is attempting to diversify the country’s economy and turn its oil riches into tech power. Taking advantage of Saudi Arabia’s considerable financial resources and cheap electricity, Humain and other local firms are developing data centers loaded with top-end semiconductors that it hopes global companies will use to build and deploy A.I. tools.
Prince Mohammed founded Humain last year to help the kingdom advance in A.I., and he became the company’s chairman. Backed by the country’s enormous sovereign wealth fund, Humain is building data centers, developing chatbots, and investing in A.I. companies.
Humain has also struck deals with the chipmaker Advanced Micro Devices and the networking firm Cisco Systems to develop data centers. The Saudi firm has backed the start-up Luma AI, which is building video-generation tools.
Microsoft, Amazon, and other global tech firms have also been expanding in Saudi Arabia as it seeks to become a global tech hub.
Saudi Arabia’s A.I. ambitions have been aided by the Trump administration. During Prince Mohammed’s visit to Washington in November, the United States and Saudi Arabia reached an agreement that allows the kingdom to buy the U.S. semiconductors needed to power A.I.
Saudi Arabia is in a regional competition with the United Arab Emirates that has extended to A.I. While Saudi Arabia has backed xAI, the Emirates has struck deals with OpenAI, including a massive data center complex under development in Abu Dhabi.
