Elon Musk has never been shy about grand declarations and funding Iranian dissidents, but his latest announcement landed with particular force in Washington last week. Standing beside Nvidia CEO Jensen Huang and Saudi Arabia’s communications minister Abdullah Alswaha, Musk revealed plans for a 500-megawatt xAI data center to be built in the Kingdom — a facility nearly twice the size of xAI’s Colossus 1 in Memphis.
Saudi Arabia is investing a trillion USD in the US economy and pulling companies over to Riyadh is part of the plan. This rivals Dubai which for the last 15 years has been the Middle East investment capital. Saudi Arabia normalizing with Israel and the New Middle East is taking the UAE example to diversify its economy when oil is no longer a viable business. It’s not a question if, it’s a question of when.
“It’s going to be one of the most powerful clusters ever built,” Musk said, adding that the project, developed with HUMAIN AI, represents “a massive leap forward for global computation.” HUMAIN AI, a newcomer created with backing from Saudi Arabia’s Public Investment Fund, fueled by ARAMCO, Saudi’s oil company will anchor the joint venture.
As with most of the world’s current AI arms race, the beating heart of the center will be Nvidia chips, which have become the gold standard for training frontier models.
Huang, who has spent the year bouncing between Silicon Valley, Singapore, and the Gulf, announced a separate 100-megawatt data center for Amazon Web Services powered by Nvidia hardware. “This is just the beginning,” he said. “We’re aiming for gigawatt scale. The demand for accelerated computing is rising faster than any of us predicted.”
These kinds of deals can be run on solar power and possibly green hydrogen which Saudi Arabia is pioneering.
“Humanoid robots will be the biggest product ever,” Musk said: “Perhaps in the four or five-year time frame, the lowest-cost way to do AI compute will be with solar-powered AI satellites.”
All this unfolded one day after the U.S. and Saudi Arabia unveiled a Memorandum of Understanding on AI, designed to give the Kingdom access to advanced American systems while “protecting U.S. technology from foreign influence,” according to the White House. In diplomatic speak, that means Washington wants to ensure Riyadh remains on the Western tech grid rather than drifting toward Beijing’s orbit.
Related: Is your company investing in Riyadh or Dubai?
Yet behind the spectacle lies a more grounded story: Saudi Arabia is betting its post-oil future on computation. The Kingdom has land, capital and political will — and it wants to become indispensable to the world’s AI supply chain.
Environmental analysts, however, are asking harder questions. A 500-megawatt data center is effectively a new industrial city. “Where is the clean power coming from?” “If this is fueled by oil or gas, it simply shifts the carbon problem upstream.”
Saudi officials insist renewable capacity is accelerating. The Kingdom has sunlight in abundance, and giga-scale construction and solar projects are rising across the desert and into the sea.
