CEO of xAI Elon Musk announced on Wednesday plans to build a massive new data center development in Saudi Arabia, working in tandem with the Trump administration’s agenda to win the global artificial intelligence race.
Crown Prince Mohammed bin Salman is currently leading a delegation to the White House, where he signed this week an “AI Memorandum of Understanding” with President Donald Trump, giving “the Kingdom access to world-leading American systems while protecting U.S. technology from foreign influence.”
The day after the two leaders made the pact, they spoke at an event at the Kennedy Center, where Musk unveiled plans to build one of the world’s largest data centers, which powers AI, in Saudi Arabia.
The 500-megawatt data center for Musk’s xAI was announced in partnership with Saudi Arabia’s HUMAIN AI company. It will be powered with computing chips from Nvidia, a U.S. technology company that generates products considered integral to beating China and other countries in the AI race.
Musk and Nvidia CEO Jensen Huang spoke at the U.S.-Saudi investment forum in Washington before attendees heard from Trump and bin Salman.
The development comes as the United States engages in an increasingly high-stakes competition to create data centers, both domestically and internationally, capable of powering AI, as global systems become reliant on the once-novel technology.
In July, the Trump administration rolled out an AI Action Plan designed to keep the U.S. at the forefront of the technology revolution.
“As our global competitors race to exploit these technologies, it is a national security imperative for the United States to achieve and maintain unquestioned and unchallenged global technological dominance,” Trump said.
On Wednesday, Musk deliberated on the importance of AI, predicting it will likely revolutionize society to the point where currency is “irrelevant” and work is “optional.”
Developing AI in space, Musk added, will also become critical to creating a competitive energy grid. Without energy sources, a resource that is in increasingly high demand, data centers cannot operate.
“The way to think of AI in space is that in order to achieve any meaningful percentage of a [way to scale civilization, where you are using even a millionth of the sun’s energy, you must have solar-powered AI satellites in deep space,” Musk said. “The cost-effectiveness of AI in space will be overwhelmingly better than AI on the ground. So long before you exhaust potential energy sources on Earth, long, long before, meaning, like, I think even perhaps in the four or five year time frame, the lowest cost way to do AI compute will be with solar-powered AI satellites.”
The latest AI partnership with Saudi Arabia comes as the White House is seeking to convince the country to join the Abraham Accords, which has normalized diplomatic relations between Israel and partnering countries.
Trump has pressed for an expansion of the accords, framing it as an opportunity to build lasting peace in the Middle East, particularly after he brokered an end to the war in Gaza between Israel and Hamas.
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During a meeting with the president on Tuesday, the Saudi crown prince said he wants his country to be part of the Abraham Accords but only if Washington commits to providing a clear path for a Palestinian state.
A U.S.-drafted proposal to rebuild Gaza that was approved by the United Nations this week calls for such an idea.
