Musk's xAI Explores Data Center Deal with Saudi-Backed Humain

Leaders

17-07-2025

Elon Musk's artificial intelligence venture, xAI, is in early-stage discussions to lease data center capacity in Saudi Arabia, according to people familiar with the matter. The move is part of xAI's broader strategy to expand its computing infrastructure in regions with low-cost energy and political alignment.
xAI is in talks with two potential partners: Humain, a Saudi-backed AI firm offering a multi-gigawatt capacity deal, and a second unnamed company currently developing a smaller, 200-megawatt facility that could be operational much sooner. The individuals requested anonymity as the discussions are private.
While Humain's offer is ambitious, it's still years away from being realized. Despite support from Saudi Arabia's Public Investment Fund, the company has yet to break ground on much of the promised infrastructure. Any agreement with xAI would therefore be a long-term bet, with no immediate impact on the startup's current computing needs.
The second potential partner, already in the process of constructing its 200-megawatt facility, presents a more viable short-term solution. In both scenarios, xAI would lease — not own — space in the data centers to power its AI models, which require significant computational resources. xAI,Humain
Representatives for xAI, Elon Musk, and Humain declined to comment.
The competition for data center capacity is intensifying as companies like xAI, OpenAI, and Meta race to train and run large AI models, including chatbots such as xAI's Grok. These facilities are expensive to build and energy-intensive to operate. If Humain's multi-gigawatt proposal comes to fruition, it could rank among the largest data centers globally — a one-gigawatt center can consume as much electricity as nearly 900,000 homes annually, according to Carbon Collective.
'It makes a lot of sense. As power demand rises, balancing energy costs with operational needs will be key,' said Kathryn Huff, former head of nuclear energy at the U.S. Department of Energy and now at the University of Illinois at Urbana-Champaign. Speaking on Bloomberg Television, Huff suggested that countries investing in new nuclear infrastructure may become appealing hosts for data centers.
Within Humain, infrastructure development is being led by Jeff Thomas, while commercial negotiations are managed by Saeed Al-Dobas. The project is also seen as an extension of Saudi Prince Alwaleed bin Talal's broader efforts to strengthen ties between Musk and the kingdom, including previous investments in xAI.
The possible partnership with Saudi Arabia reflects Musk's global search for AI infrastructure in locations where electricity is cheap and financing is plentiful. The initiative comes as Musk faces mounting regulatory and political friction in the U.S., even while maintaining close ties with former President Donald Trump. xAI has already built a massive facility in Memphis, home to its 'Colossus' supercomputer, and Musk has hinted at another nearby expansion.
Recently, xAI secured $10 billion in funding, evenly split between equity and debt. Musk has stated publicly that the company is well-capitalized, though how and where it will deploy that funding remains in flux.
Ross Nordeen, a founding member of xAI and a former Tesla employee, is leading infrastructure negotiations for the startup. He is regarded internally as a key strategist and dealmaker, similar in role to Musk confidant Omead Afshar during their time at Tesla. On the technical side, former Tesla and X executive Andree Jacobson is helping steer development.
In addition to Saudi Arabia, xAI is also exploring data center deals in the UAE and has held discussions with Abu Dhabi-based AI firm G42. Talks have also extended to several African countries with lower energy and operational costs. However, Saudi Arabia's combination of sovereign wealth and access to specialized AI chips currently makes it the most attractive prospect, according to two sources familiar with the situation.
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