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Saudi data centre sector attracts global investment

By Divsha Bhat
  • Projects worth billions announced this week
  • Indian tech group makes debut
  • Riyadh company to spend $5bn

Saudi Arabia has emerged as one of the most attractive destinations for global players looking to build and operate data centre facilities in the region.

This was one of the prominent trends evident at Leap, the technology event taking place this week in Riyadh, where numerous tech companies revealed plans to enter the market to ensure local data is stored within the geographical boundaries of the kingdom.

Among those making announcements was the Indian technology company Zoho, which inaugurated two data centres, marking its debut in the kingdom.

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Amazon Web Services, a crucial player in cloud computing, revealed its intention to invest more than $5.3 billion in establishing data centres in Saudi Arabia by 2026. 

Datavolt, based in Riyadh, disclosed an investment of $5 billion for the construction of data centres with a combined capacity exceeding 300 megawatts. 

The US software company ServiceNow is planning to invest $500 million in the kingdom with a new regional headquarters in Riyadh and two in-country data centres.

“These investments are key to enable future growth in the industry and to enable the broader transformation of the kingdom’s economy,” said Khalid Al-Falih, Saudi Arabia’s minister of investment.

Sridhar Vembu, the co-founder of Zoho Corp, said Zoho “respect[s] user privacy and the company owns and operates its data centres, ensuring complete oversight of customer data, privacy and security”.

Prasad Kalyanaraman, vice-president of infrastructure services at Amazon Web Services, said: “We look forward to helping Saudi Arabian institutions, startups and enterprises deliver cloud-powered applications to accelerate growth, productivity and innovation and spur job creation.”

A report last year by the property consultancy Knight Frank found Saudi Arabia was the fastest growing data centre market in Mena.

The kingdom’s live IT capacity has risen by 30 percent to 109 megawatts since the start of 2023, the report said.

Knight Frank attributes this growth to Saudi Arabia’s strategic location, political stability, and the increasing domestic and international demand for digital services. 

The four-day Leap event runs until March 7 at Riyadh Exhibition and Convention Centre. Organisers announced on Wednesday that new investments worth $13.5 billion had been announced at the event so far.

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