By: Economy middle east

Elon Musk's artificial intelligence company, xAI, has announced a landmark partnership with Saudi Arabia's state-backed AI venture, HUMAIN, and technology giant NVIDIA to build a massive 500-megawatt data center in Saudi Arabia. The project was unveiled at the U.S.-Saudi Investment Forum in Washington, D.C., highlighting its strategic importance. This facility is designed to be one of the largest and most advanced AI computing centers in the world, forming a key part of Saudi Arabia's ambition to become a global technology leader.

The initiative is a powerful convergence of American technological innovation and Gulf capital. xAI will lead the construction of the center outside Riyadh, while HUMAIN will act as a major financier and logistics partner. The facility will be powered by NVIDIA's industry-leading AI chips and systems, which are essential for training complex AI models. The high-level announcement, featuring Musk, NVIDIA CEO Jensen Huang, and Saudi Crown Prince Mohammed bin Salman, underscores the project's geopolitical and economic significance.

This data center is a cornerstone of Saudi Arabia's aggressive push into the tech sector, aligned with its Vision 2030 economic diversification plan. The kingdom has significantly increased its investment targets, now aiming for $1 trillion in U.S. partnerships and planning a $50 billion outlay for semiconductor technologies. The project positions Saudi Arabia to become what it calls the "third pillar of global AI infrastructure," alongside existing hubs in the U.S. and Asia.

The 500-megawatt capacity represents a quantum leap in computing power, enabling xAI to train and deploy next-generation AI models like its flagship chatbot, Grok. This scale is critical for xAI to compete with other AI giants like OpenAI and Anthropic. For Musk, securing hyperscale compute access is essential to maintain a competitive advantage in the rapidly evolving AI landscape.

The project was facilitated by a shift in U.S. policy, with the current administration signaling approval for high-end chip exports to Saudi Arabia. This move clears a major regulatory hurdle that had previously constrained the deployment of advanced NVIDIA hardware in the region, ensuring the data center has access to the necessary technology.

Beyond serving xAI's needs, the data center is intended to act as a regional hub, offering AI-driven solutions for Saudi Arabia and the broader Middle East. Applications are expected in sectors like energy, logistics, smart cities, and advanced research. HUMAIN also envisions this as part of a larger build-out, with plans to reach up to 1 gigawatt of data center capacity by 2030.

The partnership also includes plans for a "country-scale" deployment of xAI's Grok-powered services across Saudi Arabia. This will support the kingdom's broader digitization of government, retail, and industrial sectors, giving it direct access to sovereign, advanced AI capabilities and reducing its reliance on foreign technology platforms.