Elon Musk has been hunting for partners to grow his artificial intelligence start-up xAI as it tries to keep pace with OpenAI, Anthropic and Google.
Crown Prince Mohammed bin Salman of Saudi Arabia has been trying to diversify his oil-rich country’s economy by making it a global hub for tech and artificial intelligence.
On Wednesday, their intersecting interests led to a deal.
Mr. Musk’s xAI, which makes the chatbot Grok, agreed to work with the state-backed Saudi company Humain to build a new data center in the gulf country. The project is set to consume as much as 500 megawatts of electricity, which would make it xAI’s biggest data center outside the United States. Humain and xAI did not disclose the value of the deal.
The project was part of a package of military and tech deals announced on Wednesday during Prince Mohammed’s visit to Washington. The United States and Saudi Arabia appear to have reached an agreement that clears the path for the kingdom to buy the U.S. semiconductors needed to power artificial intelligence, as the United States has used A.I. chips as part of geopolitical diplomacy.
Working with xAI is a victory for Humain, an A.I. company created by Prince Mohammed in May with backing from the country’s $1 trillion sovereign wealth fund. Through Humain, Saudi Arabia is aiming to position itself as an A.I. exporter.
The goal is to use the country’s ample energy reserves, deep pockets, abundance of land and links to global fiber optic networks to provide cheap A.I. computing power, including to companies based elsewhere. Humain has set a target of powering 6 percent of the global A.I. workload in the coming years.
The deal with xAI, which includes expanding the use of Grok’s A.I. models in Saudi Arabia, deepens Mr. Musk’s business ties to the country. The kingdom also backed his $44 billion purchase of Twitter in 2022, before he renamed it X. Mr. Musk has poured money into xAI since founding the company in March 2023, including building a data center called Colossus in the Memphis area.
“The future of intelligence will be engineered through massive and efficient compute combined with the most-advanced A.I. models,” Mr. Musk said in a statement. “Humain’s capabilities enable us to build that future faster in Saudi Arabia.”
Tareq Amin, the chief executive of Humain, said the deal was “creating scale that few others can match.”
The xAI deal has been in the works for months, but was held up partly by uncertainty over Saudi Arabia’s access to the key semiconductors.
In May, President Trump announced a deal to send thousands of A.I. chips made by Nvidia to the kingdom. But the chips had not been delivered over U.S. concerns about Saudi Arabia’s economic and tech ties to China.
As major American A.I. firms have pledged to spend billions to win the tech race, the Gulf has been one of the few places with enough available money to provide support. Now each major American A.I. company appears to be emerging with its own Middle Eastern champion.
OpenAI signed a deal this year with the United Arab Emirates’ state-backed investment firm MGX to build a data center near Abu Dhabi with another Emirati company, G42. Anthropic has garnered investment from Qatar’s sovereign wealth fund.
Amazon, Microsoft, Nvidia, Qualcomm and other tech firms have also been expanding business in Saudi Arabia.
Human rights issues, once a deterrent for many companies to working with Saudi Arabia, no longer appear to be a major concern. On Tuesday, executives from many of the biggest tech companies attended a dinner hosted by President Trump honoring Prince Mohammed, including Mr. Musk.
Adam Satariano is a technology correspondent for The Times, based in London.
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