Aramco partners with US startup Groq for AI data centre

SPA

• Aramco Digital facility ready this year
• Centre for high-speed AI processing
• Groq challenging Nvidia’s dominance

Saudi Aramco’s digital arm is partnering with US semiconductor startup Groq to build the world’s largest artificial intelligence inferencing data centre. 

Unlike regular data centres, which handle a range of computing tasks, an AI inferencing data centre is designed specifically to run AI models that make rapid predictions or decisions. 

The facility will use Groq’s chips to perform high-speed AI processing, a key capability for technologies such as self-driving cars and national security applications that need almost instantaneous data processing to function efficiently.

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Expected to be operational by the end of 2024, the centre aims to handle millions of data points per second and increase its capacity tenfold by 2025. 

The partnership could help Saudi Arabia emerge as a key player in the AI sector, which is currently dominated by the US and China.

Groq, a Silicon Valley startup founded by former Google engineers, is seeking to challenge Nvidia’s dominance in the AI chip market with its Language Processing Units, designed to accelerate AI tasks in real-time. 

The company recently raised $640 million from investors, including BlackRock, Cisco, and Samsung, valuing it at $2.8 billion – more than double its valuation in 2021. 

The partnership with Aramco Digital could be a crucial validation for Groq, which has yet to generate significant revenue despite its high-profile backers.

For Aramco Digital the deal represents a significant step in modernising its operations and reducing reliance on oil revenues. 

The Saudi Data and AI Authority said this week that the kingdom is setting aside $18 billion to become a leader in cloud computing, opening the door for foreign companies to establish data centers in the kingdom.

Saudi Arabia’s push to build local data centres gives it control over information flows while allowing tech companies access to its market of more than 32 million people. 

“It’s very important to have sovereignty and localisation,” said Faisal Alkahtani, a Saudi Telecom (STC) advisor, on the sidelines of the AI forum in Riyadh where the partnership was announced.

“All our data centres are in Saudi Arabia, so we are the sole custodian of anything that’s being hosted.”

The partnership with Groq also underlines the Gulf state’s strategy to bypass traditional tech giants like Nvidia, which currently controls up to 95 percent of the AI chip market. 

Groq’s chips are marketed as faster and more power-efficient, offering an alternative to Nvidia’s processors. 

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With competitors such as Amazon, Google and Microsoft developing their own AI chips and Nvidia cementing its market lead, Groq needs to prove it can scale up quickly.

Aramco is also buying advanced chips from Cerebras Systems, a chipmaker backed by Abu Dhabi which is challenging Nvidia’s dominance. 

Saudi Arabia’s move comes as demand for AI hardware surges, with Goldman Sachs predicting up to $1 trillion will be spent over the next four years on AI data centres, chips and utility upgrades. 

Much of this investment will go towards expanding inferencing capacity.

The heightened activity comes amid geopolitical tensions. US export controls have restricted China’s access to Nvidia’s most powerful chips, while some sales to the Middle East are also restricted to prevent onward transfer to China.

Saudi Arabia's close ties to both the US and China have drawn attention from Washington. 

“It’s a concern to US authorities,” a Gulf-based diplomat said, pointing to the kingdom’s balancing act between the two superpowers.