Elon Musk’s AI startup, xAI, is in early talks to lease data center space in Saudi Arabia. The goal is to expand the company’s infrastructure into areas with low energy costs and strong political support. According to people familiar with the matter, xAI is speaking with two possible partners. One is Humain, a Saudi-backed AI company offering several gigawatts of capacity in the future. The other is a company currently building a 200-megawatt facility that could be ready much sooner. In both cases, xAI wouldn’t own the facilities. Instead, it would lease space to power its AI models.
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Although Humain’s proposal offers massive long-term potential, its facilities haven’t been built yet. This makes the 200-megawatt facility a more realistic option in the near term. For reference, a facility with one gigawatt of power could use as much energy as 900,000 homes per year, according to Carbon Collective. Interestingly, former U.S. Energy Department official Kathryn Huff explained that as demand for power increases, companies will need to carefully balance energy costs with performance, which could possibly lead them to turn to countries with new nuclear infrastructure.
Separately, xAI is also exploring deals in the UAE with Abu Dhabi-based AI firm G42, as well as in African countries where energy and labor costs are lower. Still, Saudi Arabia is the top candidate thanks to its wealth and access to specialized AI chips. The company has also recently raised $10 billion in funding and is preparing to raise more funds at a $200 billion valuation, as it continues to build its infrastructure, which includes a supercomputing hub called Colossus in Memphis.
What Is the Prediction for Tesla Stock?
When it comes to Elon Musk’s companies, most of them are privately held. However, retail investors can invest in his most popular company, Tesla (TSLA). Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 13 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $298.97 per share implies 7.1% downside risk.
