Oman acquires a stake in Elon Musk’s xAI
As the nation ups its digital strategy
Oman Investment Authority (OIA), the sovereign wealth fund of the Arabian Gulf country, has taken an undisclosed stake in Elon Musk’s artificial intelligence (AI) company, xAI. This is the latest in a series of high-profile partnerships with the American billionaire entrepreneur.
Musk founded xAI to develop advanced AI models with real-world applications.
The OIA’s investment move is part of Oman’s broader strategy to enhance its position in the digital economy of the Arabian Peninsula. The company aims to complement Oman’s ambitions in the AI sector, which are encapsulated in its newly unveiled National Artificial Intelligence Policy.
This policy provides a framework for the Arabian Gulf nation’s AI development and deployment. Oman’s government has set a goal of increasing the digital economy’s contribution to the country’s GDP from a modest 2 per cent in 2021 to a substantial 10 per cent by 2040.
The OIA’s investment in xAI is not its first collaboration with Musk’s ventures. In December 2021, Oman also invested in SpaceX, Musk’s aerospace company that designs and manufactures advanced rockets and spacecraft. This ongoing relationship highlights the growing ties between Musk’s companies and the Middle East, where financial backing for cutting-edge technologies has been increasingly prevalent.
xAI’s backing is part of a broader trend of Middle Eastern investment in high-tech enterprises. In May 2024, xAI raised $6 billion in funding, pushing its valuation to $24 billion.
Notable investors in that round included Saudi Prince Alwaleed bin Talal and the Saudi Arabian conglomerate Kingdom Holding. Musk’s ongoing involvement in other ventures underscores the Arabian Gulf region’s appetite for technology investments.
For example, during Musk’s 2022 acquisition of Twitter, which was rebranded as X, Prince Alwaleed bin Talal reinvested his $1.9 billion stake in the newly privatised company. Additionally, the Qatar Investment Authority contributed $375 million to the platform.
In 2020, Abu Dhabi-based International Holding Company acquired a 94 per cent stake in Falcon CI IV LP, a private equity fund that includes SpaceX among its investments.
Hero image: Residential housing in Muscat, the capital of Oman. Credit: Vera
