{"id":85175,"date":"2024-04-15T00:00:00","date_gmt":"2024-04-15T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/04\/15\/a-snapshot-of-saudis-data-center-industry-as-we-angle-for-regional-leadership\/"},"modified":"2024-04-15T00:00:00","modified_gmt":"2024-04-15T00:00:00","slug":"a-snapshot-of-saudis-data-center-industry-as-we-angle-for-regional-leadership","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/04\/15\/a-snapshot-of-saudis-data-center-industry-as-we-angle-for-regional-leadership\/","title":{"rendered":"A snapshot of Saudi\u2019s data center industry as we angle for regional leadership"},"content":{"rendered":"<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"> <strong>Saudi and the UAE have both made it clear they have ambitions to be the <\/strong><strong>region\u2019s AI superpower<\/strong>, and realities of demand (if bulls are right), cash on hand, and national sovereignty suggest each will carve out unique roles.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>There are <\/strong><strong>24 operational data centers in Saudi today with a capacity of 123 MW<\/strong>, according to <a target=\"_blank\" href=\"https:\/\/www.arizton.com\/market-reports\/saudi-arabia-data-center-market-investment-analysis\" style=\"\" rel=\"noopener\">a report by market researcher Arizton<\/a>. Another 37 facilities are in the cards, the report reads. Meanwhile, the UAE currently hosts 52 data centers with an overall capacity of 235 MW, <a target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-04-11\/race-for-ai-supremacy-in-middle-east-is-measured-in-data-centers\" style=\"\" rel=\"noopener\">Bloomberg<\/a> reports citing data platform analytics platform DC Byte.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>But we\u2019re well behind advanced economies: <\/strong>Germany alone has more than 1 GW of data center capacity, according to the business news information service. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">AI is expected to contribute USD 135 bn to Saudi Arabia\u2019s economy by 2023, a <a target=\"_blank\" href=\"https:\/\/www.pwc.com\/m1\/en\/publications\/potential-impact-artificial-intelligence-middle-east.html#:~:text=The%20US%24320%20billion%20impact%20of%20AI%20for%20the%20Middle%20East&amp;text=When%20we%20look%20at%20the,equivalent%20to%20US%24320%20billion.\" style=\"\" rel=\"noopener\">recent report from PwC showed<\/a>. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>(Sound smart: Data center capacity is measured in MW because energy is the only <\/strong><strong>common denominator <\/strong>for the power-hungry centers. Data centers house thousands of servers as well as networking equipment and cooling systems, all of which consume massive amounts of power.)<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>In context: <\/strong>Data centers provide the kind of computational power required for training and deploying complex AI models. Localizing the facilities speeds up their performance and makes them more accessible to local users at higher speeds, thereby potentially streamlining progress in AI technology, <a target=\"_blank\" href=\"https:\/\/www.digitalrealty.com\/resources\/articles\/data-center-ai\" style=\"\" rel=\"noopener\">according to Digital Reality<\/a>. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>And then there\u2019s data sovereignty: <\/strong>Countries around the world want to keep close tabs on their data \u2014 and to control who it might be shared with, and when. Concern about data sovereignty are at the heart of <a target=\"_blank\" href=\"https:\/\/enterprise.news\/ksa\/en\/news\/story\/87eda04f-8799-43ec-8360-cf8b49594df3\/\" style=\"\" rel=\"noopener\">proposed regulations<\/a> on which the Saudi Data and AI Authority is now seeking public feedback, as we reported last month.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Saudi is vying for the lead: <\/strong>The Kingdom plans to boost its data center capacity by an additional 467 MW over the coming years, with a future supply that outpaces the UAE\u2019s 343 MW of planned data center capacity over the same period.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>By the numbers: <\/strong>The local data center market was valued at USD 1.78 bn in 2023, and is projected to grow at a CAGR of 10% until it hits USD 3.2 bn in 2029, the Arizton report reads. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Incentives: <\/strong>The government is offering lower energy rates for large cloud providers to set up shop here, a subsidy that the UAE has failed to match, according to Equinix MENA MD Kamel Al-Tawil. The Kingdom is also mulling over plans to fastrack licenses and approvals for foreign companies interested in developing the local digital infrastructure. <\/p>\n<p class=\"tag-border-left\"> WHO\u2019S DOING WHAT? FOREIGN INVESTORS<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Per a <\/strong><strong><a target=\"_blank\" href=\"https:\/\/www.blackridgeresearch.com\/blog\/latest-list-of-top-largest-biggest-data-center-projects-in-saudi-arabia-ksa\" style=\"\" rel=\"noopener\">report<\/a><\/strong> by market research and consulting firm Blackridge:<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong><a target=\"_blank\" href=\"https:\/\/www.oracle.com\/\" style=\"\" rel=\"noopener\">Oracle<\/a><\/strong><strong> has a USD 1.5 bn investment plan for local data centers <\/strong>including the existing <a target=\"_blank\" href=\"https:\/\/docs.oracle.com\/en-us\/iaas\/releasenotes\/changes\/b38848ee-ecd2-4c36-9491-95628f16dffd\/\" style=\"\" rel=\"noopener\">Oracle<\/a><a target=\"_blank\" href=\"https:\/\/docs.oracle.com\/en-us\/iaas\/releasenotes\/changes\/b38848ee-ecd2-4c36-9491-95628f16dffd\/\" style=\"\" rel=\"noopener\">cloud Jeddah region<\/a> and the upcoming Oracle cloud region in Neom. Its planned <a target=\"_blank\" href=\"https:\/\/www.oracle.com\/eg\/news\/announcement\/oracle-to-invest-us-1-point-5-billion-to-meet-cloud-computing-demand-in-saudi-arabia-2023-02-06\/\" style=\"\" rel=\"noopener\">Oracle cloud Riyadh region<\/a> will be hosted by Stc-owned regional data center provider <a target=\"_blank\" href=\"https:\/\/center3.com\/\" style=\"\" rel=\"noopener\">Center3<\/a>. The cloud infrastructure company also has a new data center in the pipeline slated to go online in 2026 with a capacity of 60 MW.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Dubai-based Damac Group and fiber firm <\/strong><strong><a target=\"_blank\" href=\"https:\/\/www.cinturiongroup.com\/\" style=\"\" rel=\"noopener\">Cinturion<\/a><\/strong><strong> have a planned data center and cable <\/strong><strong>landing station in Jeddah\u2019s King Abdullah Economic City <\/strong>with a total capacity of 33 MW and IT load of 10 MW. Damac unit Edgnex is currently working on additional facilities in Dammam and Riyadh. Edgnex has also signed an MoU with Salam, Cinturion, and Emaar, the Economic City to develop a digital infrastructure hub in KAEC. This is part of Damac\u2019s USD 1 bn data center development strategy.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Chinese internet services giant Tencent Holding wants to <\/strong><strong><a target=\"_blank\" href=\"https:\/\/enterprise.news\/ksa\/en\/news\/story\/63200ca0-8687-4aaa-a93e-7fbb76261cf3\/aramco-wants-to-become-china%25e2%2580%2599s-partner-of-choice-on-more-than-just-oil\" style=\"\" rel=\"noopener\">up its cloud business game in<\/a><\/strong><strong><a target=\"_blank\" href=\"https:\/\/enterprise.news\/ksa\/en\/news\/story\/63200ca0-8687-4aaa-a93e-7fbb76261cf3\/aramco-wants-to-become-china%25e2%2580%2599s-partner-of-choice-on-more-than-just-oil\" style=\"\" rel=\"noopener\">Saudi and the UAE<\/a><\/strong><strong>.<\/strong> The Shenzhen-based firm is particularly interested in offering cloud storage services to local gaming companies, as a starting point for further investments in computing power for AI applications, and developing an Arabic language model. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Amazon Web Services recently <\/strong><strong><a target=\"_blank\" href=\"https:\/\/enterprise.news\/ksa\/en\/news\/story\/72e23e4f-4eab-455f-9a17-23a22cad6710\/\" style=\"\" rel=\"noopener\">unveiled<\/a><\/strong><strong> a plan to <\/strong><strong>invest more than USD 5.3 bn<\/strong> in cloud infrastructure here. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>New York-listed customer experience management platform <\/strong><strong><a target=\"_blank\" href=\"https:\/\/www.sprinklr.com\/\" style=\"\" rel=\"noopener\">Sprinklr<\/a><\/strong><strong> has unveiled <\/strong><strong><a target=\"_blank\" href=\"https:\/\/enterprise.news\/ksa\/en\/news\/story\/cdc315d2-7a49-42dc-9f13-ca334be4636e\/sprinklr,%253cmark%253e-google-cloud-%253c%2Fmark%253elaunch-local-data-hosting\" style=\"\" rel=\"noopener\">a local<\/a><\/strong><strong><a target=\"_blank\" href=\"https:\/\/enterprise.news\/ksa\/en\/news\/story\/cdc315d2-7a49-42dc-9f13-ca334be4636e\/sprinklr,%253cmark%253e-google-cloud-%253c%2Fmark%253elaunch-local-data-hosting\" style=\"\" rel=\"noopener\">data hosting solution on Google Cloud for Saudi clients<\/a>&nbsp;<\/strong>who need local data hosting solutions. The collaboration with Google Cloud marks Sprinklr\u2019s first big expansion into the domestic market.<\/p>\n<p class=\"tag-border-left\"> WHO\u2019S DOING WHAT? DOMESTIC INVESTORS<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Riyadh-based <\/strong><strong><a target=\"_blank\" href=\"https:\/\/data-volt.com\/\" style=\"\" rel=\"noopener\">DataVolt<\/a>&nbsp;<\/strong><strong>is pledging <\/strong><strong><a target=\"_blank\" href=\"https:\/\/enterprise.news\/ksa\/en\/news\/story\/72e23e4f-4eab-455f-9a17-23a22cad6710\/day-1-recap:-leap-2024-lines-up-%253eusd-11.9-bn-in-tech-investment\" style=\"\" rel=\"noopener\">USD 5 bn<\/a><\/strong><strong> to locally develop sustainable data centers, <\/strong><strong>with a planned capacity of over 300 MW. <\/strong>The data services provider is currently operational in Riyadh, Dubai and California.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The USD 500 mn <\/strong><strong><a target=\"_blank\" href=\"https:\/\/tonomus.neom.com\/en-us\" style=\"\" rel=\"noopener\">Tonomus<\/a><\/strong><strong> digital communication facility owned by NEOM is set to <\/strong><strong>operate software controlled networks supporting up to 60 locations by 2025<\/strong> and a total of 200 mn loT devices by 2030. Another data center is in the works in Neom under a partnership between stc and its subsidiary solutions by stc.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Al-Moammar Information Systems Company (MIS) is set to carry out a USD 414 mn <\/strong><strong>expansion of two data centers in Dammam.<\/strong> The company entered into an agreement with Saudi Fransi Capital in 2021 for the construction, design and administration of six data centers with an expected budget of USD 2.6 bn.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Alibaba-STC have entered a partnership that will see the Chinese tech giant earmark USD <\/strong><strong>238 mn to develop cloud computing infrastructure in the Kingdom.<\/strong><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>THE GAME-CHANGER? A USD 40 bn PIF fund. <\/strong>The Public Investment Fund may be cooking up a world-scale AI play, with officials said to be exploring the setup of <a target=\"_blank\" href=\"http:\/\/enterprise.news\/ksa\/en\/news\/story\/399e70a3-e2fe-4f5f-8a42-286b5b4ce2db\" style=\"\" rel=\"noopener\">a USD 40 bn fund to invest in artificial intelligence<\/a>. The fund would make PIF the world\u2019s largest investor in AI and it could start investing as early as the second half of this year. The fund would invest in everything AI, from chipmakers and AI companies to data centers.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>There are currently 24 operational data centers in the local market<\/p>\n","protected":false},"author":1,"featured_media":85176,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2641],"tags":[742,39,10,2689,2433],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-85175","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-enterprise-explains","tag-artificial-intelligence","tag-enterprise-explains","tag-enterpriseam-ksa","tag-investment","tag-technology","wpautop","entry"],"acf":{"mongo_id":"422651fb-d176-4872-8d79-8205368005cd","order":"0","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/4\/855.jpg","photo_position":"above","homepage_title":"","full_issue_title":"A snapshot of Saudi\u2019s data center industry as we angle for regional leadership","related_issue":[85171],"teaser":"There are currently 24 operational data centers in the local market","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/4\/.538cd591-6305-4f65-bd4d-f2712f5a7b13.mp3"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - 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