Regional sovereign funds, including Qatar and Oman, have shown strong interest in xAI, reflecting regional support for Musk's venture.

Elon Musk's AI start-up, xAI, is exploring data center expansion in Saudi Arabia, aiming to leverage the country's cheap energy and political support for infrastructure growth.

The company is considering two potential partnerships: a long-term deal with Humain, a Saudi PIF-backed firm planning to develop a massive gigawatt-scale data center, and a shorter-term option with an unnamed company working on a 200-megawatt facility.

Humain, established in 2025 and supported by Saudi Arabia's sovereign wealth fund, aims to build one of the largest data centers globally, with plans for 6.6GW capacity over the next decade.

Experts like Kathryn Huff emphasize the importance of balancing operational costs and energy expenses when developing such energy-intensive AI infrastructure.

xAI's dual-track strategy allows it to scale operations efficiently without heavy capital investment, reducing risks associated with infrastructure development.

The company recently secured a $10 billion funding round, indicating strong financial backing, although specific deployment plans are still being formulated.

While risks like delays and geopolitical shifts exist, the backing from Saudi Arabia's PIF and xAI's funding provide a buffer for long-term growth.

In 2025, global AI investments are projected to reach $320 billion, with major players like Meta and CoreWeave announcing significant data center investments to support AI model training.

Leading tech firms such as Google, Meta, and Microsoft are heavily investing in data center infrastructure, underscoring the intense competition in AI development.

This expansion presents investment opportunities in energy arbitrage, geopolitical stability, and scalability, crucial as AI models become more energy-intensive.

xAI is expanding its data center capacity to compete with AI giants like OpenAI and Anthropic, utilizing its supercomputer cluster Colossus in Memphis, claimed to be the world's largest.