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Saudi Arabia’s state-owned AI company Humain has invested $3bn into Elon Musk’s xAI, deepening the partnership between the tech billionaire and the country as it seeks to become a global AI hub.
Humain announced on Wednesday it contributed a significant part of the $20bn raised by xAI in its last funding round in January, which completed shortly before Musk merged the AI start-up with his rocketmaker SpaceX to create a $1.25tn business.
The Riyadh-based group said its investment made it a “significant minority shareholder” in xAI, with its holdings subsequently converted into SpaceX shares.
The investment comes as part of the country’s multibillion-dollar push to diversify its economy and pursue its ambitions to become a global AI hub, underpinned by data centre development and new AI models.
Humain, which is funded by Saudi’s Public Investment Fund, was launched last year by Crown Prince Mohammed bin Salman as Riyadh’s prime vehicle to drive the kingdom’s strategy and investment.
It first partnered with xAI in November last year, committing to develop more than 500 megawatts of new data centre capacity and to roll out xAI’s Grok chatbot in Saudi Arabia.
“xAI’s trajectory, further strengthened by its acquisition by SpaceX, one of the largest technology mergers on record, represents the kind of high-impact platform we seek to support with significant capital,” said Tareq Amin, Humain’s chief executive, on Wednesday.
Its investment could result in a financial windfall for the group, with SpaceX aiming for an initial public offering as early as June. The IPO is expected to raise as much as $50bn, which would make it the largest flotation of all time, exceeding the $29bn raised by Saudi Aramco in 2019.
Oil-rich Gulf nations have been investing heavily in AI as they seek to diversify their economies. That has made state-backed funds in the region a vital source of capital for Silicon Valley AI groups, whose demand for investment to fuel their growth is voracious.
xAI’s rivals including OpenAI and Anthropic have both raised large sums from investors in the Gulf, while a number of smaller groups building AI infrastructure, such as chipmaker Groq, have also forged partnerships.
