U.S. and Saudi Arabia Announce 500-Megawatt Data Center to Boost Economic Growth

Elon Musk’s xAI has entered a significant collaboration with Humain, Saudi Arabia’s government-supported AI company, to construct a 500-megawatt data center. This initiative highlights Saudi Arabia’s drive to establish itself as a leading force in artificial intelligence and aligns with President Donald Trump’s efforts to strengthen the U.S. economy through AI. The deal was revealed during Crown Prince Mohammed bin Salman’s visit to the United States and follows Saudi Arabia’s broader commitment to invest $1 trillion in American enterprises,

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The facility, which will utilize Nvidia’s advanced Blackwell processors, will be xAI’s most extensive operation outside the United States, rivaling its 300-megawatt Colossus 1 site in Memphis. Musk, who recently mended fences with Trump after disagreements over fiscal matters,

at a Kennedy Center event, predicting that humanoid robots could bring widespread prosperity and eradicate poverty. The gathering, which included Trump, CEO Jensen Huang, and other technology executives, showcased a strategic partnership between American tech innovation and Saudi energy assets.

Trump’s economic strategy is increasingly centered on AI-powered expansion, as he claims the industry has driven unprecedented stock market highs this year. Nevertheless,

, such as escalating energy expenses and unfulfilled employment promises, as the growth of AI infrastructure puts pressure on power supplies and debt-financed growth raises doubts about long-term stability. , investments in AI have helped counteract economic instability caused by Trump’s tariffs, though the sector’s dependence on borrowing could indicate vulnerability by 2026.

The partnership between the U.S. and Saudi Arabia extends past artificial intelligence. Aramco has closed $30 billion worth of deals with American companies, including collaborations in liquefied natural gas and oilfield services. At the same time, Humain is expanding through agreements with AMD, Cisco, and Luma AI—a generative video company that recently secured $900 million in funding led by the Saudi firm. Nvidia’s Huang praised Humain’s rapid progress, describing it as “extraordinary,” while also

and establish supercomputing capabilities in Saudi Arabia.

Musk’s recent appearance at the White House, his first since a contentious exit from the DOGE Office, signaled improved relations with Trump. The two, who previously disagreed over electric vehicle incentives and fiscal policy, now seem aligned in promoting AI as a key driver of economic growth. During the event,

to increase his investment commitment “while we were taking the picture,” blending political showmanship with economic negotiation.

The recently announced AI Memorandum of Understanding between the U.S. and Saudi Arabia focuses on sharing technology while protecting American intellectual property. This agreement, combined with Saudi oil and U.S. technological expertise, positions both countries to lead the next era of AI development. While Musk envisions a future with solar-powered AI satellites and work becoming optional,

, pointing out that “everyone’s jobs will change.”