Saudi Arabia is making big moves and is investing heavily to become a major digital hub. According to Jones Lang LaSalle Inc. (JLL), Riyadh will lead data center growth in the Middle East over the next three years.
Rapid Growth in Data Centers
JLL’s latest analysis shows that the Riyadh data center capacity will grow by an impressive 37% annually through 2027. That’s nearly twice the growth rate expected in Dubai and Abu Dhabi. It’s also well above the 15% global average.
Also read: AI Data Centers: The Foundation of Modern Artificial Intelligence
Why Riyadh?
Saudi Arabia is embracing digital transformation at an incredible pace. The government’s plan to upgrade and modernize the economy is attracting attention from the international AI community. Moreover, companies like Microsoft, Amazon Web Services, and Equinix are already investing in the region.
Daniel Thorpe, head of EMEA data center research at JLL, highlighted the key factors behind this growth. He pointed to government policies, AI-driven initiatives, and a booming tech ecosystem. “Saudi Arabia is determined to be an AI powerhouse,” he said. “Their investment in digital infrastructure reflects that.”
Big Tech and Startups
Global tech giants and startups are taking notice. Microsoft and Amazon Web Services are expanding their cloud infrastructure in the kingdom. Meanwhile, Groq Inc., a US-based startup, is teaming up with Saudi Aramco to build an AI inferencing center.
Saudi Arabia’s free zones and tax incentives are helping attract even more investment. The government is also focused on data sovereignty. This ensures sensitive data stays within the country’s borders to add another layer of security and control.
A $100 Billion AI Project in the Works
Saudi Arabia is planning a massive AI initiative. Reports suggest the project could receive up to $100 billion in funding. The goal is to boost data center growth and rival AI advancements in the UAE.
However, challenges remain. US government restrictions on advanced AI chip exports could slow progress. The UAE faces similar barriers, making it a regional issue for AI development.
Saudi Arabia vs. the UAE
Right now, the Middle East’s data center market is worth about $6 billion. The UAE leads in overall capacity, with Saudi Arabia close behind. But that may change soon.
Saudi Arabia has a population of 35 million and a strong focus on AI. Experts believe this gives it a significant edge. The Proptech Connection, a real estate and tech consultancy, sees Saudi Arabia as a top contender for AI dominance.
Stephen Macdonald, a managing partner at Proptech, explained why. “They have the ambition and resources to overcome challenges like rising energy costs and complex infrastructure demands,” he said. “With their commitment and capital, they can lead the AI revolution.”
