Elon’s xAI Is Courting Saudi Oil Money… Here’s Why That Spells Trouble for Silicon Valley

While OpenAI, Google, and Meta are busy stealing AI engineers from one another and tossing around equity packages with Lebron James type money… Elon Musk’s xAI is taking a very different approach to dominating artificial intelligence. Instead of quietly recruiting talent or rolling out a thoughtful product roadmap, Elon is doing what Elon does best: raising more capital at insane valuations (if it works, why stop?).

And now, xAI is reportedly preparing to raise a new round of capital at a valuation as high as $200 billion… a tenfold jump from just last year. We’re talking about a company that didn’t even exist before 2023, now claiming it’s worth more than Boeing, McDonald’s, and Netflix. If you’re wondering just how serious they are, take a look at the track record: In 2016, PIF dropped $3.5 billion into Uber… back when the rideshare company was still throwing money out the window to subsidize $5 trips to the airport. That investment gave PIF a nearly 5% stake, made them Uber’s largest single investor at the time, and secured a board seat… giving them influence during Uber’s most pivotal years of expansion and eventual IPO.

Then there’s Lucid Motors. PIF put in over $1.3 billion in 2018 to rescue the EV startup from the brink of irrelevance bankruptcy. Today? They own more than 60% of the company and are actively building a Lucid factory inside Saudi Arabia. Their strategy goes way past “investing”... it’s vertical integration on a national scale.

(Source: Lucid Motors)

And of course, the most controversial story in sports (other than Deshawn Watson’s “happy ending” massage addiction: LIV Golf. PIF reportedly spent over $700 million to launch the rebel golf league… offering jaw-dropping paydays to lure away washed up stars like Phil Mickelson and Dustin Johnson. (Mickelson alone scored a $200 million deal.) Within two years, they forced the PGA Tour to the negotiating table and brokered a merger. Needless to say, they have more power than pretty much anyone in the world… and if they set their sights on something, you better watch out. Now they’re turning their attention (and their oil money) toward AI. And Elon’s xAI is their horse in the race.

To be clear, PIF already has skin in the game through an $800 million indirect stake via Kingdom Holding Company. But insiders say that was just the warm-up. This next round could see the Saudis taking a front-row seat… one that comes with real weight and strategic intent. While Silicon Valley firms are still debating calendar invites and tweaking valuation models, PIF has the ability to deploy billions in the blink of an eye.

(Source: Reuters)

That kind of firepower changes the dynamic overnight. A lead role from PIF turns xAI into more than a startup chasing OpenAI and Anthropic… it transforms it into a national priority for a government with nearly unlimited resources and a long-term vision that spans far beyond quarterly earnings. It gives Musk something even his rivals can’t replicate: geopolitical leverage.

Once that deal locks in, xAI will be accelerating with the force of a trillion-dollar sovereign machine behind it… moving faster, louder, and with far more weight than any of its rivals can match. That’s what makes this move a real threat. Not because xAI is ahead on tech (Grok still needs a muzzle), but because Elon just found the kind of backer who doesn’t blink at $10 billion burn rates… and tends to get what they want.

Even without the Saudi’s money, xAI isn’t a broke startup hoping to compete with OpenAI. It’s becoming the glue that binds together Elon’s empire. In the last year alone, Musk has merged xAI with his social platform X in a deal that valued the combined company at $113 billion. Tesla is already selling hundreds of millions worth of Megapacks to xAI, while SpaceX (another private Musk company) is reportedly committing $2 billion to the AI firm. Even Grok, xAI’s chatbot (the one that recently made headlines for praising Hitler again), is now being integrated directly into Tesla vehicles. 

But chaotic headlines aside, there’s a bigger picture here… and it’s starting to come into focus. While Sam Altman is busy fine-tuning GPT and Sundar Pichai is pushing corporate-friendly AI into Google Docs, Elon is welding together a vertically integrated AI empire… one that includes a car company, a rocket company, a media platform, and now, potentially, a direct pipeline to Saudi Arabia’s trillion-dollar sovereign wealth fund.

This goes way further than building a smarter chatbot. It’s about weaving AI into every layer of modern life… communication, transportation, energy, and eventually, space. Call it the Musk Matrix. And with PIF’s checkbook and political clout backing him, he might just pull it off.

At the time of publishing this article, Stocks.News holds positions in Google, Meta, McDonald’s, Tesla, and Netflix as mentioned in the article.