How Musk, Nvidia, and Saudi Arabia Are Building a New AI Power Base

Elon Musk’s artificial intelligence startup xAI is becoming the first customer of a massive 500-megawatt data center being built in Saudi Arabia.

The project, developed in partnership with the kingdom’s state-backed AI venture Humain, will rely on hundreds of thousands of Nvidia GPUs, making it one of the world’s most ambitious “sovereign AI” facilities.

Musk and Nvidia CEO Jensen Huang announced the agreement during the U.S.-Saudi Investment Forum in Washington, where the two highlighted the growing global race to secure national AI infrastructure.

The facility is part of a broader push by Saudi Arabia’s Public Investment Fund to position the kingdom as a major player in AI capacity, attracting major U.S. semiconductor companies such as AMD, Qualcomm, and Cisco, which will also supply chips and networking systems.

For xAI, the project represents a significant escalation in its competition with OpenAI and Anthropic, following Musk’s split from OpenAI and the rapid rollout of xAI’s Grok model.

For Saudi Arabia, the data center underscores its strategy to anchor next-generation technology inside the kingdom rather than rely solely on foreign cloud platforms.