PIF pivots Alat from chip manufacturing to data center buildout

It looks like we may not see a Saudi chip fab after all — the kingdom’s plan to build a USD 100 bn electronics manufacturing hub champion is being recalibrated. Alat, the Public Investment Fund’s advanced manufacturing investment platform introduced in 2024, dumped CEO Amit Midha and scrapped semiconductor manufacturing plans, Semafor reports. Muhammad Nasser Aldawood, PIF’s head of industrials and mining, has been tapped to lead Alat as acting CEO.

Behind the shift: Alat reassigned its semiconductor-focused team and related resources to instead focus on building out a plan to turn Saudi Arabia into a data center hub, according to the report. That change in focus comes as the kingdom reviews some of its major spending plans, but is doubling down on its data center ambitions. In January, data centers dominated project awards in Saudi Arabia, with a single SAR 10.1 bn (USD 2.7 bn) contract for a new 480 MW data center accounting for nearly 90% of all awarded contract value.

OUR TAKE- The changes at Alat are more of a reprioritization than a retreat from industrial policy. Rather than pouring USD tens of bns into high-stakes silicon fabrication plants that face stiff competition from the US, Europe, and Asia, Saudi Arabia is instead banking on what’s working in its favor. Cheap energy, strategic geography, and rising global demand for cloud and AI infrastructure make a focus on data centers a faster, more bankable pathway to capturing value in the digital economy.

In context: Saudi continues to tone down some of its more grandiose ambitions, including the scrapping in recent months of contracts worth USD bns for gigaprojects like the Trojena mountain resort-cum-ski destination in Neom.