- xAI is in talks with Saudi Arabia’s Ministry of Investment to expand its data centre footprint.
- The company seeks sovereign support as it scales infrastructure for AI model training.
What happened: XAI discusses data centre development with Saudi officials
Elon Musk’s AI start-up xAI is reportedly engaging with Saudi Arabia’s Ministry of Investment regarding the potential establishment of a major data centre in the kingdom. According to IndexBox, the discussions focus on xAI’s long-term infrastructure requirements, particularly for training large language models. The company seeks to secure a partnership involving land, power, and possibly financial backing.
This comes as xAI looks to scale its operations, which currently rely on significant GPU resources supplied by NVIDIA. The expansion would involve high-performance computing clusters essential for competitive AI development. While early-stage, the talks indicate that Saudi Arabia is being considered as a critical infrastructure partner as xAI prepares to compete with rivals such as OpenAI, Anthropic, and Google DeepMind.
Musk’s previous engagements in the region include Tesla’s raw materials sourcing and discussions around Starlink deployment. These indicate a broader interest in building relationships with Gulf states as strategic technology partners.
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Why it’s important
The proposed collaboration between xAI and Saudi Arabia highlights a growing trend: sovereign states aligning with private AI firms to bolster national infrastructure and technological self-reliance. Saudi Arabia, through its Public Investment Fund and Ministry of Investment, has expressed interest in artificial intelligence and cloud computing projects that could support its Vision 2030 digital goals. The partnership may offer xAI financial and regulatory advantages while granting Saudi Arabia access to cutting-edge AI development capacity.
This reflects a wider geopolitical shift. Countries like the UAE and Singapore have made similar moves, supporting AI start-ups or hosting regional cloud zones for hyperscalers. The push for sovereign AI infrastructure comes amid growing concerns over data sovereignty, compute access, and control of foundational models.
Given xAI’s ambition to rival established labs, securing direct state-level support and infrastructure outside the US could reduce dependency on American regulators and power grids. However, it may also raise questions about ethical oversight, given different regulatory frameworks. With compute power becoming a geopolitical asset, these deals underscore how AI development is no longer only technical—it is increasingly strategic.
