LONDON — Saudi Arabia’s state-backed artificial intelligence company, Humain, said 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 AI company created last year by Crown Prince Mohammed bin Salman, said it made the investment just before 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. 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 U.S. 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.

Musk Creating Stronger Bonds With Saudi Arabia

Musk has been forging closer ties to Saudi Arabia as he competes against companies like OpenAI, Google and Anthropic in the race to build AI applications and infrastructure. Last year, xAI announced plans to build a major AI data center with Humain in Saudi Arabia.

Crown 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 AI tools.

Crown Prince Mohammed created Humain last year to help the kingdom advance in AI, making himself the company’s chair. Backed by the country’s enormous sovereign wealth fund, Humain is building data centers, developing chatbots and investing in AI 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 startup 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 AI ambitions have been aided by the Trump administration. During Crown 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 AI.

Saudi Arabia is in a regional competition with the United Arab Emirates that has extended to AI. While Saudi Arabia has backed xAI, the UAE has struck deals with OpenAI, including a massive data center complex under development in Abu Dhabi.

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This article originally appeared in The New York Times.

By Adam Satariano/Haiyun Jiang
c. 2026 The New York Times Company