Saudi Arabia’s Push into Data Centers with Major Planned Investments

Saudi Arabia wants to turn itself into an AI powerhouse by building out data centers. Public Investment Fund (PIF) leads the charge with big deals, and the kingdom tops upcoming capacity in the MENA region.

PIF’s $10 Billion Google Cloud Partnership

PIF struck a $10 billion deal with Google Cloud this year to build a “global AI hub.” The agreement covers data centers and AI workloads hosted locally in Saudi Arabia. CNBC notes this fits into broader efforts by UAE and Saudi leaders to draw AI investment with sovereign wealth and tech ties.

Ray Dalio, Bridgewater Associates founder, sees the Middle East, including Saudi Arabia, turning into a “Silicon Valley of capitalists.” He points to money and talent flowing in, creating buzz like San Francisco’s tech scene. Invezz spotlights the PIF-Google deal in this context.

PIF’s AI efforts go further. Its Humain unit partners with AirTrunk, backed by BlackRock and Canada Pension Plan, on hyperscale data centers, Arab News reports. Amazon bets big too, with AWS eyeing Saudi projects, per another Arab News story.

Plans for Data Embassies and Solar-Powered Centers

Saudi Arabia eyes “data embassies”—sites storing foreign data under its host laws, like diplomatic outposts. The kingdom aims to host these amid its sovereign AI drive. That same CNBC piece details how Saudi plans major data center builds powered by solar energy. It bets on cheap land, power, and location between Europe, Middle East, and Asia to attract users.

A draft Global AI Hub Law from April outlines three levels of data embassies, from full guest control to hybrid Saudi court help. Still, experts doubt quick rollout without bilateral treaties and trust.

Leading MENA’s Upcoming Data Center Boom

A new report maps 197 existing and 114 upcoming data centers across MENA, covering Bahrain to UAE. Saudi Arabia takes more than 40% of total upcoming power capacity, making it the regional leader. GlobeNewswire highlights Saudi Telecom Company (center3) among top operators by capacity, alongside Gulf Data Hub and EdgeConneX.

197 existing centers across MENA, strong Saudi presence.
Upcoming: 114 facilities, with Saudi driving growth via IT load capacity adds through 2029.
Key data tracked: White-floor space, power capacity, rack counts, pricing for retail/wholesale colo.

Challenges remain. Water scarcity hits cooling needs, and the grid relies on oil—64% of energy in 2023 per IEA data. Saudi pushes solar, but experts flag sustainability trade-offs.