Saudi has a new data center law: Saudi’s Communications, Space, and Technology Commission (CST) is out with the proposed Global AI Hub Law, which is tailored to international clients and tech firms setting up their data centers in the Kingdom, the commission said in a statement. The law aims to create secure sovereign data centers on Saudi soil, furthering the Kingdom’s goal of becoming a leading global digital hub. The draft law (pdf) will be available for public consultation until 14 May via Istitlaa.

The law outlines the following types of AI data hubs:

  • A private hub is a standalone data center – or an isolated segment of a data center – that exclusively hosts the data, applications, infrastructure, and services of a single guest country. The center will operate under the guest country’s laws and management through a bilateral agreement with the Kingdom.
  • An extended hub hosts an authorized operator’s digital assets and services – potentially for its subscribers – under a dual agreement where the operator manages the hub in compliance with Saudi law, while the partnering guest country oversees adherence to its own legal framework for the data hosted.
  • A virtual hub is managed by a local service provider to host customer data and services, which are then subject to the exclusive jurisdiction and laws of designated foreign states where the customers are based. Saudi authorities will provide support for enforcing legitimate foreign legal orders, within the bounds of Saudi law.

The Kingdom has been ramping up its data center capacity: The Kingdom is planning a USD 100 bn AI project to rival the UAE as a technological hub, although details are scant. Leap 25 recently saw a flurry of investments in data centers, including USD 1.4 bn investment from Alfanar for four data centers, as well as a USD 5 bn agreement between DataVolt and Neom to set up a fully sustainable AI data center with an initial capacity of 300 MW capacity, eventually ramped up to 1.5 GW.

AND- It’s paying off: By 2023, Saudi Arabia was the second-largest regional market for colocation data centers with 22 active and 40 planned, alongside 10 hosted supercomputers, Saudi Data and Artificial Intelligence Authority (SDAIA) said in a September report. The Kingdom is set to become the Middle East’s data center powerhouse by 2027, with a projected compound annual growth rate of 37% — almost double that of Dubai and Abu Dhabi and well above the 15% global average, according to a Jones Lang LaSalle report cited by Bloomberg.

DATA POINT- Backed by some 14 SDAIA regulations, the domestic AI market is expected to hit USD 9.2 bn by 2030 (12% of GDP), with USD 15 bn of expected investments to boost data center capacity to 1.3 GW.

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