Saudi Arabia’s Kingdom Holding Buys $400 Million Stake in xAI

xAI logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration
xAI logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration
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Saudi Arabia’s Kingdom Holding Buys $400 Million Stake in xAI

xAI logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration
xAI logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration

Kingdom Holding Company (KHC) said on Wednesday it has acquired a key stake in xAI Corporation, an artificial intelligence company founded by US billionaire Elon Musk for 1.5 billion Saudi Riyals ($400 million), becoming the second largest investor in X and xAI.

The acquisition of the new stake is part of xAI’s Series C funding round, said KHC in its filing to Saudi bourse Tadawul.

This transaction follows KHC's previous investment at the same value in xAI during its Series B funding round.

It further solidifies KHC's strategic partnership with Elon Musk, and follows its strategic stake in X (Twitter), held since 2015, KHC stated.

A post on X said Prince Alwaleed bin Talal became the second largest shareholders in Musk’s two companies, X & xAI.

In November 2022, the Saudi prince moved almost 35 million Twitter shares through the Kingdom Holding Company, worth about $1.9 billion at the $54.20 per share sale price. That made him the “second-largest investor” in the new parent company.
Funding Rounds

The funding rounds consist of several fundraising events in which startups or existing companies raise funds from investors to continue building their infrastructure and accelerate research and development.

The rounds start with a “seed round” of funding where a startup typically raises money from the owners to cover initial operating expenses and then expand to Series A, B, and C funding rounds as the company develops to raise additional capital.

In terms of risks, Series B funding is generally less risky than Series A funding, while Series C is less risky than Series B and is typically used by companies that are growing rapidly and need additional capital to fund their expansion.

Musk's xAI Series C funding round included the Qatar Investment Authority (QIA) and the Oman Investment Authority (OIA).

Participants included Morgan Stanley and BlackRock, which were described as two of the major investors in the fundraising round.

KHC, in which Public Investment Fund (PIF) owns a 17% stake, said xAI has a $45 billion valuation with the latest funding round, indicating a significant increase from its $25 billion valuation during the Series B funding round, the filing showed.

Following the announcement of the acquisition, the shares of KHC, listed on the Saudi Stock Exchange, rose by 0.44% to 9.16 riyals.

xAI’s strategy focuses on developing leading AI models and working closely with other technology companies associated with its founder, including Tesla, SpaceX, and X, whose application has over 500 million users.

KHC said this transaction further solidifies KHC's strategic partnership with Elon Musk, and follows its strategic stake in X (Twitter), held since 2015.

It forms part of KHC’s business model of securing early stakes in emerging technologies and its ambition to lead and innovate within the AI industry, it added.



Oil Stocks in US Strategic Petroleum Reserve Fall to Lowest Level since 1982

Crude oil, gasoline, and diesel storage tanks at Kinder Morgan's facility in Los Angeles (Reuters)
Crude oil, gasoline, and diesel storage tanks at Kinder Morgan's facility in Los Angeles (Reuters)
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Oil Stocks in US Strategic Petroleum Reserve Fall to Lowest Level since 1982

Crude oil, gasoline, and diesel storage tanks at Kinder Morgan's facility in Los Angeles (Reuters)
Crude oil, gasoline, and diesel storage tanks at Kinder Morgan's facility in Los Angeles (Reuters)

Stocks of crude oil in the US Strategic Petroleum Reserve fell to 283 million barrels last week, the lowest level since October 1982, according to data from the Department of Energy, Reuters reported.

The drawdowns are part of a US agreement to release 172 million barrels from the facility.

Additionally, the Trump administration last week said it is offering to loan energy companies 40 million barrels of oil from the Strategic Petroleum Reserve.


Saudi Market Resumes Decline Under Pressure from Banking Sector

A man monitors trading screens in the Saudi market (Saudi Exchange)
A man monitors trading screens in the Saudi market (Saudi Exchange)
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Saudi Market Resumes Decline Under Pressure from Banking Sector

A man monitors trading screens in the Saudi market (Saudi Exchange)
A man monitors trading screens in the Saudi market (Saudi Exchange)

The Saudi Exchange's main index, TASI, resumed its decline at the close of Monday's trading, falling 0.25 percent to 10,479 points.

The decline was driven by losses in a number of stocks. On Sunday, the index had ended a losing streak, rising about 1 percent.

Riyadh Development Company (Ridan) led the decliners, falling 4.43 percent to SAR18.13, followed by SNB, which dropped 2.77 percent to SAR38.60, and BSF, which fell 2.75 percent to SAR19.80.

On the other hand, Saudi Fisheries Company led the gainers, rising 9.96 percent to SAR51.90, followed by East Pipes Integrated Company, which gained 7.70 percent to SAR184.70, and Leden, which rose 6.98 percent to SAR1.84.


Saudi Arabia's SAL Expands Logistics Options as Global Trade Map Shifts

A SAL booth at the Saudi Warehousing & Logistics Expo (Asharq Al-Awsat)
A SAL booth at the Saudi Warehousing & Logistics Expo (Asharq Al-Awsat)
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Saudi Arabia's SAL Expands Logistics Options as Global Trade Map Shifts

A SAL booth at the Saudi Warehousing & Logistics Expo (Asharq Al-Awsat)
A SAL booth at the Saudi Warehousing & Logistics Expo (Asharq Al-Awsat)

The speed and cost of transporting shipments are no longer the only factors determining companies' choices in the logistics services market. Geopolitical disruptions and changes in global trade routes have redefined the concept of supply chain efficiency. Securing transportation alternatives, the ability to shift quickly between routes and modes of transport, and ensuring the uninterrupted flow of goods have become more prominent factors in customer decisions.

In Saudi Arabia, this shift is reflected in growing demand for integrated logistics services, alongside the expansion of industrial activity, imports, and infrastructure investment. Companies operating in the sector are taking advantage of this trend to expand their operational capabilities and develop solutions that combine air, land, and sea transport, providing greater flexibility in response to changes in global trade.

SAL is among the leading beneficiaries of this demand, having recorded its highest quarterly revenue in its history during the second quarter of this year, at SAR512.1 million ($136.6 million), up 30 percent year on year. Net profit rose 18 percent to about SAR191 million ($50.9 million). In the first half of the year, revenue increased 23.1 percent to SAR957.9 million ($255.4 million).

Rayan Al-Bakri, CEO of SAL's logistics business, said that "reliability and flexibility have become among the most important factors influencing customer decisions and global supply chains." He noted that when certain trade routes or transportation channels face operational challenges or unexpected changes, customers turn to solutions that ensure business continuity and speed of access to markets.

He added in an exclusive statement to Asharq Al-Awsat that SAL is seeing growing interest in integrated logistics solutions that combine more than one mode of transport according to each customer's needs. He explained that the company does not view air or land freight as direct alternatives to sea transport, but rather as complementary elements within a single system designed to achieve efficiency and flexibility in the movement of goods.

Al-Bakri said that "goods always find a way to reach the end customer, with the means varying," noting that the company continues to leverage strategic partnerships to expand logistics connectivity options for customers.

In this context, he pointed to SAL's cooperation with SPARK Logistics to activate a new land corridor between the Port of Sohar in Oman and the dry port at King Salman Energy Park (SPARK). He said the route strengthens regional trade flows and increases the flexibility and reliability of supply chains.

He also pointed to increased operating capacity at airports and the provision of solutions to receive and accommodate demand from customers and partners in the domestic and Gulf markets, alongside connecting airports through an integrated operating network to enhance supply chain flexibility.

Positive Demand Outlook

Al-Bakri views the outlook for demand for SAL's services positively in the coming period, amid continued growth in inbound shipments and expanding imports of spare parts and equipment related to industrial activities, as well as rising demand for more integrated and flexible logistics solutions across the region.

According to Al-Bakri, this outlook is based on several factors, including the diversity of the customer base, the expansion of specialized logistics services, and the investments the company is making to strengthen its operational capabilities and infrastructure.

Domestic consumption and the building of strategic inventories for most products are also creating opportunities for sustainable growth across the sector as a whole.

At the same time, the sector is dealing with a range of global variables that could affect profitability and operating costs, including transportation, insurance, and energy costs, as well as geopolitical developments that could affect international trade flows.

Al-Bakri said SAL is focusing instead on improving operational efficiency, increasing productivity, leveraging modern technologies, and diversifying revenue sources to support sustainable performance over the long term.

He added that the ability to adapt quickly to changes, along with operational discipline and continued investment in value-added services, would remain among the key factors supporting the company's performance in the coming period, ensuring business continuity and maintaining service levels for partners and customers across different sectors and services.

Infrastructure Expansion

Investment in infrastructure and operational capabilities is a key part of SAL's growth strategy. The company is working on a range of parallel initiatives aimed at increasing operational readiness, enabling the logistics sector, and strengthening the Kingdom's position as a global logistics hub.

Al-Bakri said the company's current priorities include expanding operational capabilities at airports across the Kingdom, developing SAL logistics zones, and investing in digital solutions and smart technologies that improve operational efficiency and accelerate the flow of shipments through the various stages of the supply chain.

SAL is also focusing on developing infrastructure that supports specialized services and integrated logistics solutions in line with the needs of the Kingdom's vital and growing sectors.

In this context, Al-Bakri said the company is continuing to expand its international presence through the acquisition of Aviapartner Liège, strengthening connections between its customers and one of Europe's air cargo hubs and supporting SAL's reach across global trade routes.

At the same time, the company is expanding its network of global partnerships supporting the development of advanced infrastructure and logistics services. These include two memorandums of understanding signed with CIMC Middle East to explore cooperation opportunities in cargo handling systems, automation, robotics, and autonomous vehicles.

The areas of cooperation include developing facilities and warehouses within SAL's logistics zones and attracting global investments and companies to the Kingdom, strengthening its position as a regional hub for manufacturing, logistics services, and international trade.

Automation and Specialized Services

As part of its digital transformation, SAL continues to invest in modern technologies and smart solutions, including cooperation with Huawei Tech Investment Saudi Arabia to explore applications of artificial intelligence, 5G, and cloud computing in the logistics sector.

Al-Bakri said these efforts support the development of smarter logistics zones, improve operational efficiency, and enhance the customer experience across the various stages of the supply chain.

At the same time, specialized logistics services, particularly pharmaceutical, medical, and temperature-controlled shipments, continue to grow amid the high levels of precision and reliability required by these sectors.

He said these services are becoming increasingly important within SAL's strategy because they require advanced operational capabilities, specialized infrastructure, and specialized expertise, in addition to the value they provide to customers.

According to Al-Bakri, the company continues to accelerate its automation and digital transformation efforts through investment in smart technologies and solutions that improve operational efficiency, handling accuracy, and decision-making speed.

SAL is also focused on sustainability by adopting practices and solutions that contribute to more efficient use of resources and support the objectives of the logistics sector in the Kingdom.

Al-Bakri said the company's direction is to expand specialized and integrated services, support them with modern technologies, and develop more sustainable logistics solutions that meet customer expectations and keep pace with the transformation taking place in the sector at both the regional and global levels.