MBS Backed Saudi Humain Co
Invests $3 Billion in xAI Ahead of SpaceX Merger
Humain,
which was created by Crown Prince Mohammed bin Salman last year, said it made
the investment just before xAI was acquired by SpaceX,
Mr. Musk’s rocket company.
1.
$3 Billion Investment Announced
Saudi Arabia’s state-backed AI firm Humain
invested $3 billion in xAI, deepening ties
between the kingdom and Elon Musk.
2.
Timing Before Major Merger
The investment was made just before xAI was combined
with SpaceX, creating a company valued at over $1 trillion.
3.
Equity Conversion
Humain became a significant minority shareholder in xAI, with its holdings later converted into shares of
SpaceX.
4.
Potential IPO Windfall
Musk is reportedly planning an initial public offering (IPO) of the merged
company later this year, potentially increasing the value of Humain’s stake.
5.
Strategic U.S. Contractor Stake
The deal gives Saudi Arabia indirect ownership in a key U.S. government
contractor. SpaceX launches military and intelligence satellites and operates Starlink,
which has supported Ukraine’s military communications.
6.
Musk’s Growing Saudi Ties
Musk has strengthened partnerships in Saudi Arabia as he competes with OpenAI,
Google, and Anthropic in the AI race.
7.
Joint AI Infrastructure Plans
Last year, xAI announced plans with Humain to build a major AI data center
in Saudi Arabia.
8.
Saudi Economic Diversification Push
Crown Prince Mohammed bin Salman established Humain
to drive AI development as part of efforts to diversify the oil-dependent
economy.
9.
AI Ecosystem Development
Backed by Saudi Arabia’s sovereign wealth fund, Humain
is building data centers, developing AI tools, and
investing in startups.
10.
Global Tech Partnerships
Humain has signed agreements with Advanced Micro
Devices and Cisco Systems, and invested in Luma AI.
11.
U.S. Policy Support
During a Washington visit, Saudi Arabia reached a semiconductor supply
agreement with the United States under Donald Trump, enabling the
kingdom to purchase advanced chips for AI development.
12.
Regional AI Rivalry
Saudi Arabia’s AI expansion intensifies competition with the United Arab
Emirates, which has partnered with OpenAI on a large AI data center project in Abu Dhabi.
Overall:
The $3 billion investment strengthens Saudi Arabia’s strategic foothold in
global AI and space technology while reinforcing Elon Musk’s financial and
geopolitical alliances amid intensifying global AI competition.
Saudi
Arabia’s state-backed artificial intelligence company, Humain,
said on Wednesday that it had invested $3 billion in Elon Musk’s xAI, deepening the country’s financial ties with the tech
billionaire.
Humain, the Riyadh-based A.I. company created
last year by Crown Prince Mohammed bin Salman, said it made the investment just
before Mr. Musk announced that he had combined xAI
with his rocket company, SpaceX, creating a business worth more than $1
trillion.
Humain’s investment made it “a significant
minority shareholder in xAI, with its holdings
subsequently converted into shares in SpaceX,” the Saudi company said in a
statement.
The
timing of the investment could produce a financial windfall for the Saudi firm.
Mr. Musk is said to be planning an initial public offering of the combined
company later this year.
The
deal gives Saudi Arabia a stake in a key American government contractor.
SpaceX, the world’s biggest rocket maker, plays an important role in U.S.
national security systems, launching military and intelligence satellites. The
company also operates Starlink, the biggest satellite internet provider, whose
technology has been critical for Ukraine’s military defenses.
Mr.
Musk has been forging closer ties to Saudi Arabia as he competes against
companies like OpenAI, Google and Anthropic in the race to build A.I.
applications and infrastructure. Last year, xAI
announced plans to build a major A.I. data center
with Humain in Saudi Arabia.
Prince
Mohammed is attempting to diversify the country’s economy and turn its oil
riches into tech power. Taking advantage of Saudi Arabia’s considerable
financial resources and cheap electricity, Humain and
other local firms are developing data centers loaded
with top-end semiconductors that it hopes global companies will use to build
and deploy A.I. tools.
Prince
Mohammed created Humain last year to help the kingdom
advance in A.I., making himself the company’s chairman. Backed by the country’s
enormous sovereign wealth fund, Humain is building
data centers, developing chatbots and investing in
A.I. companies.
Humain has also struck deals with the
chipmaker Advanced Micro Devices and the networking firm Cisco Systems to
develop data centers. The Saudi firm has backed the
start-up Luma AI, which is building video-generation tools.
Microsoft,
Amazon and other global tech firms have also been expanding in Saudi Arabia as
it seeks to become a global tech hub.
Saudi
Arabia’s A.I. ambitions have been aided by the Trump administration. During
Prince Mohammed’s visit to Washington in November, the United States and Saudi
Arabia reached an agreement that allows the kingdom to buy the U.S.
semiconductors needed to power A.I.
Saudi
Arabia is in a regional competition with the United Arab Emirates that has
extended to A.I. While Saudi Arabia has backed xAI,
the Emirates has struck deals with OpenAI, including a massive data center complex under development in Abu Dhabi.