The Kingdom of Artificial Intelligence: Saudi Arabia expands data centres for AI

Riyadh plans to increase its data centre space by 37% annually until 2027, which is almost twice the growth rate of Dubai and Abu Dhabi and significantly ahead of the global rate of 15%. These data are provided by Jones Lang LaSalle (JLL) in its analysis for Bloomberg.

Here's What We Know

Saudi Arabia is actively building cloud infrastructure and data centres to become a regional leader in artificial intelligence and technology as part of its economic diversification strategy. The demand for data processing is growing due to the emergence of new technology industries and the opening of headquarters of hundreds of international companies in Riyadh.

US tech giants Microsoft, Amazon Web Services and Equinix have already announced plans to build data centres in the kingdom. Startup Groq Inc. is working with oil company Aramco to create an artificial intelligence centre. Investments are stimulated by tax incentives, free economic zones, and data sovereignty protection policies.

Saudi Arabia is also planning to launch a $100 billion artificial intelligence initiative, including the development of new data centres. It aims to compete with the United Arab Emirates, which currently has the largest data centre capacity in the region.

At the same time, Saudi Arabia's plans are complicated by US restrictions on the export of the latest artificial intelligence chips, which also affect the UAE.

JLL estimates that the data centre market in the Middle East is worth $6 billion. With a population of around 35 million people and significant investments in technology, Saudi Arabia could quickly become the region's leader.

Consulting firms say the kingdom's ambition and financial resources will help overcome challenges such as high electricity costs and the lengthy process of building large data centres.

Source: Bloomberg