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Saudi Arabia is currently the second-largest market in the Middle East for colocation data centers, boasting 22 active centers with another 40 in the pipeline, according to a recent report (pdf) by the Saudi Data and Artificial Intelligence Authority (SDAIA). The report tracks developments in the sector between SDAIA’s founding in 2019 and 2023.
The Kingdom’s total data center capacity — which is typically used to measure a country’s AI capabilities — grew 28% y-o-y to 204 MW in 2023. Additionally, the country is now home to some 10 supercomputers with several ranked among the top 500 globally. On the regulatory front, SDAIA has published 14 data and AI-related rules and policies.
The growth in data center capacity and capabilities comes as Saudi — led by the private sector — is pouring significant resources into building out its AI sector. Private sector investments in homegrown AI companies came in at USD 1.7 bn in 2023, marking a 14% y-o-y increase. Policymakers target USD 20 bn in yearly investments in the sector by 2030. Additionally, the number of AI companies operating in the Kingdom topped 242 in 2023, up from 177 in 2019.
REMEMBER- The Kingdom’s LEAP conference raised some USD 9.5 bn in new tech investments in its 2023 run, with that figure increasing by more than half to some USD 14 bn raised in LEAP 2024.
Setting the stage for an AI-driven future: The domestic AI market is expected to grow at a CAGR of 29% to USD 9.2 bn by 2030, contributing 12% to GDP. The Kingdom also expects to attract USD 15 bn in investments to boost its data center capacity to 1.3 GW during the period. Sectors such as healthcare, finance, and smart cities are set to see the most benefits from an AI boom that is enabled by government support and driven by private sector engagement, the report said.
Cloud infrastructure is increasingly in demand: The public cloud services market grew 30% y-o-y in 2023, reflecting the increasing adoption of cloud technologies across Saudi’s various sectors, the report adds. The number of cloud computing permits issued increased by 40% during the period, reflecting a growing demand for cloud infrastructure to support AI development. There are currently 8 public cloud regions in Saudi Arabia set up by international cloud service providers.
On upskilling the local talent pool: Some 86% of Saudi universities offer bachelor’s degrees in AI-related fields, with 42% of Saudi institutions also providing AI-specific programs at the bachelor’s level and 44% at the master’s level. The number of graduates with AI-related bachelor’s degrees grew 40% between 2019 and 2023, with a total number of upwards of 38k graduates during the period. These advances are happening against a backdrop of high AI literacy, with 75% of Saudis familiar with AI and 64% acquainted with AI applications.
