Saudi Arabia’s state-owned artificial intelligence company Humain has invested $3 billion into Elon Musk’s AI startup xAI, marking one of the largest strategic AI investments ever made by the kingdom, according to Reuters.
The investment was part of xAI’s massive $20 billion Series E funding round completed in January, which valued the company highly enough to support its later merger with SpaceX. That merger created a combined entity reportedly worth around $1.25 trillion, positioning Musk’s AI and space businesses as one of the most powerful technology ecosystems in the world.
Humain’s contribution makes it a significant minority shareholder in xAI. Following the merger, its stake was converted into shares of SpaceX, potentially increasing its long-term value if SpaceX proceeds with its planned initial public offering. SpaceX is reportedly targeting an IPO that could raise as much as $50 billion, which would surpass Saudi Aramco’s record-setting $29 billion listing in 2019.
The investment is part of Saudi Arabia’s broader effort to transform itself into a global artificial intelligence hub. Backed by the country’s Public Investment Fund and launched under Crown Prince Mohammed bin Salman, Humain was created specifically to accelerate AI infrastructure, data center development, and domestic AI capabilities.
Saudi Arabia has already partnered closely with xAI. In November, Humain committed to building over 500 megawatts of new data center capacity to support AI computing, while also planning to deploy xAI’s Grok chatbot within the kingdom. These projects aim to position Saudi Arabia as a regional leader in AI technology and infrastructure.
The move reflects a growing trend among oil-rich Gulf nations to invest heavily in emerging technologies as part of economic diversification efforts. With global demand for AI infrastructure surging, Middle Eastern sovereign wealth funds have become key backers of leading AI companies.
Major AI firms, including OpenAI and Anthropic, have also secured investments and partnerships from Gulf investors. These partnerships provide essential capital for building data centers, developing advanced models, and scaling global AI services.
For Saudi Arabia, the investment is not just financial but strategic. By securing ownership stakes in cutting-edge AI companies and infrastructure, the country is positioning itself to play a central role in shaping the future of artificial intelligence while reducing its reliance on oil revenues.