Saudi firm Humain takes $3bn stake in Musk’s xAI

Saudi Arabia’s state-owned artificial intelligence company Humain has committed $3 billion to Elon Musk’s AI venture xAI as part of a substantial funding round conducted just before the startup was brought under the umbrella of his space technology firm SpaceX. The deal immediately positioned Humain as a significant minority shareholder, with its equity in xAI converted into SpaceX shares after the acquisition, the company said. The transaction reflects a strategic push by Saudi authorities to deepen ties with leading technology ventures and expand the kingdom’s footprint in global AI and compute infrastructure.

Launched in May 2025 under the aegis of the Public Investment Fund, Humain was established to drive the kingdom’s ambitions of becoming a global AI hub and diversifying its economy away from hydrocarbons. Its chief executive, Tareq Amin, described the $3bn allocation as a “conviction investment” in AI platforms poised to shape the future of computing and automation. Although exact terms of the share conversion were not disclosed, the transition of Humain’s xAI holdings into SpaceX equity underscores how intertwined Musk’s tech ecosystem has become.

xAI closed an upsized Series E financing round of about $20 billion in January, a fundraising campaign that exceeded earlier targets and brought in a broad array of global investors seeking exposure to cutting-edge large language models and generative AI products. Participation by Humain in that round placed the Saudi firm alongside major technology players and institutional backers, underlining a growing trend of sovereign capital moving into frontier AI ventures.

The subsequent acquisition of xAI by SpaceX, a move spearheaded by Musk as part of a consolidation strategy spanning artificial intelligence, aerospace, satellite communications and direct-to-device platforms, combined the two companies into an entity that analysts value in the region of $1.25 trillion. Humain’s altered shareholding, now within this larger corporate structure, therefore gives the Saudi investor exposure to both AI development and the broader ambitions of SpaceX’s integrated innovation ecosystem.

Humain’s decision to back xAI is consistent with its earlier commitments made at high-profile investment forums, where the company agreed with xAI on initiatives to build more than 500 megawatts of advanced AI data centre capacity within Saudi Arabia and to deploy xAI’s Grok AI models locally. The partnership aligns with broader public policy objectives encapsulated in Saudi Vision 2030, which aims to stimulate technology adoption, foster high-value industries, and reduce economic dependency on oil.

The investment also comes amid an intensifying global competition for AI talent, infrastructure and market share. Firms such as OpenAI and Anthropic have attracted substantial capital over the past year, prompting governments and sovereign funds to seek strategic stakes that can secure technology transfer, local capacity or influence over next-generation platforms. xAI has been particularly notable for its emphasis on large-scale models and its development of Grok, an AI chatbot intended to rival established offerings in natural language processing and reasoning.

Saudi Arabia’s involvement in the funding round follows deals by other Gulf sovereign investors in prominent US-based AI firms over the past few years, reflecting a regional pattern of capital flows into Silicon Valley and beyond. Observers note that such investments serve dual objectives: potential financial returns and the acquisition of know-how that can be applied to domestic digital transformation goals. Humain’s role as both an investor and infrastructure partner potentially positions it as a conduit for bringing advanced AI capabilities into the Middle East’s burgeoning tech ecosystem.

Despite enthusiasm around the deal, some analysts caution that heavy involvement by state-linked capital in commercial technology ventures can raise questions about governance, strategic alignment, and the motivations behind capital allocation. In the case of AI, these considerations are compounded by broader debates over the ethical use of the technology, regulatory oversight, and competitive dynamics between private and public sector interests.