Can Saudi Arabia become a computing power center by investing?

Saudi Arabia is redefining its wealth composition.

On April 25, 2016, the government of Saudi Arabia (hereinafter referred to as "Saudi") announced the "Saudi Vision 2030", aiming to make Saudi Arabia one of the top 15 economies in the world by 2030. It plans to increase the total assets of the Public Investment Fund (PIF) from $160 billion to nearly $1.9 trillion, raise the ranking in the Global Competitiveness Index from 25th to within the top 10, increase the share of foreign direct investment in GDP from 3.8% to 5.7%, boost the contribution of the private economy to GDP from 40% to 65%, increase the share of non - oil foreign trade exports from 16% to 50%, and raise the government's non - oil fiscal revenue from $43.5 billion to $266.7 billion.

When money only represents numbers, traditional tycoons are looking for "skill - based ways to make money".

01

The traditional way of making money is so boring

Saudi Arabia's traditional oil economy is controlled and dominated by the state (through Saudi Aramco). From a macro perspective, such an economic structure will relatively weaken the innovation vitality of the domestic economy.

From the Saudi Vision 2030, it is not difficult to see the Saudi government's determination to reduce its economy's dependence on the traditional oil industry. With the explosion of large AI models, computing power, regarded as the new - generation "oil", has become an important area for this traditional energy giant.

From the end of 2023 to the beginning of 2024, Saudi Arabia had 22 active data centers, and the number of data centers is expected to reach 62 in the next few years.

With OpenAI's announcement of the "Stargate" project, the construction of global data centers was in full swing in 2025.

In May 2025, during Trump's second visit to Saudi Arabia, AMD announced a cooperation with Saudi artificial intelligence company Humain. (For more information about Humain, you can read the previous original article "Semiconductors in the Middle East, the Future is Bright" by ICViews.)

A large number of American technology companies have chosen to deploy their computing power in far - away Saudi Arabia. The wealthy "landlords" didn't disappoint them. After Trump's visit in May this year, Humain started the construction of its first batch of data centers in August 2025. Tareq Amin, the CEO of Humain, revealed that the parks in Riyadh and Dammam in the Eastern Province are expected to be officially put into operation in the second quarter of 2026, with an initial capacity of 100 megawatts.

By 2030, Humain plans to add 1.9 gigawatts of data center capacity. According to currently public information, the Stargate project plans to build data centers with a total computing power of 4.5 gigawatts in the United States by 2030. That means this company will gather more than one - third of the "Stargate power".

Saudi Arabia hopes to build itself into an AI powerhouse in the Middle East.

In August 2025, Humain, a newly - established artificial intelligence company in Saudi Arabia, started the construction of its first batch of data centers in the country. The data centers are planned to be put into operation in early 2026 and will use semiconductors imported from the United States.

02

A desert becomes a blue ocean for data centers

After NVIDIA and AMD announced their cooperation with Humain, this month, Pat Gelsinger, the CEO of Intel, met with Saudi officials to discuss possible cooperation in the semiconductor and AI fields.

Companies that have smelled the opportunities in Saudi Arabia's data center market are not limited to the three giants.

ICViews sorted out some data center projects that have confirmed investments in Saudi Arabia since 2021. It is not difficult to find that before 2024, most of the projects were data center projects resulting from cooperation between Saudi Arabia and China. These projects are currently in operation and have supported the basic foundation of Saudi Arabia's cloud - computing market, serving the needs of the retail, fintech, Internet, artificial intelligence and other sectors in the Middle East centered around Saudi Arabia.

After Huawei and Alibaba entered Saudi Arabia's data center market, Tencent Cloud officially announced in 2025 that it would build its first data center in the Middle East in Saudi Arabia. At the same time, in line with the local industrial innovation needs, it will invest more than $150 million in the Middle East in the next few years.

03

Why do technology companies prefer Saudi Arabia?

Electricity prices are "heavily discounted"

Another huge problem for data centers is energy consumption. The electricity consumption problem of data centers in the United States has become a major headache for American technology giants. In 2023, the data centers operated by companies such as Amazon, Google, Meta, and Microsoft accounted for 4% of the total electricity consumption in the United States. The US government's prediction shows that this proportion may rise to 12% by 2028. Since AI processing consumes more energy than streaming media or standard cloud workloads, Andy Jassy, the CEO of Amazon, once publicly stated that power supply is the main bottleneck restricting the capacity of new data centers. Since 2020, the average electricity price for US residents has increased by more than 30%. A study by Carnegie Mellon University and North Carolina State University estimates that the electricity price across the United States may increase by another 8% by 2030. In states like Virginia, the electricity price increase may be as high as 25%.

In Saudi Arabia, electricity is not a problem. The installed power generation capacity of Saudi Electricity Company is 40,858 megawatts, and the annual electricity sales are 212.263 billion kilowatt - hours, basically meeting the electricity needs of industrial and agricultural production and residents' daily lives. In the future, it plans to build 10 new gas combined - cycle power plants with a total installed capacity of not less than 20 gigawatts, 16 new nuclear power plants with a total installed capacity of 22 gigawatts, and a 4 - gigawatt pumped - storage power plant. Chinese enterprises investing and setting up factories there do not need to bring their own power generation equipment.

Saudi Arabia has a unique strategic location connecting Asia and Africa and a strong power infrastructure. Saudi Electricity Company is implementing a five - year development plan to enhance power transmission capacity. In the future, it plans to add another 66,000 kilometers of transmission lines and build 290,000 kilometers of distribution lines, including two new 7 - gigawatt high - voltage direct - current transmission lines and 259 substations. Saudi Arabia plans to invest a total of 500 billion Saudi riyals in 2,600 grid - related projects in the next 7 - 8 years to improve the stability and reliability of the power grid.

In September 2024, the average electricity price for the US industrial sector was 8.51 cents per kilowatt - hour. According to the investment guide data from the Ministry of Foreign Affairs, the industrial electricity price in Saudi Arabia in 2024 was between 5 cents and 8 cents per kilowatt - hour. According to relevant institutional predictions, OpenAI needs 3,617 NVIDIA HGX A100 servers to support ChatGPT's interaction, including 28,936 GPUs, corresponding to a daily electricity consumption of about 564 MWh. If AI applications are embedded in every Google search, it would require about 400,000 - 510,000 sets of NVIDIA HGX A100 servers, corresponding to a daily electricity consumption of about 62 - 80 GWh.

Based on the above data calculation, data centers in Saudi Arabia can save hundreds of millions of dollars in electricity bills every year. According to predictions, the annual electricity consumption of US data centers may reach 1.2 trillion kilowatt - hours by 2030. Calculated with a price difference of 5 cents per kWh, this would be a huge price difference of $6.12 billion.

From the perspective of cost - saving, Saudi Arabia's electricity price has become the most important factor attracting the giants.

It's just the desert

For technology companies, data centers need to meet strict requirements for sustainable development. These challenges are an obstacle for companies seeking to build data centers in Europe or the United States because there are abundant forests and green spaces. The frequencies and waves emitted by servers, and even the heat generated, will have a direct impact on the surrounding natural life. Perhaps what Saudi Arabia lacks the most is forests and green spaces. The desolate natural environment of a vast expanse of yellow sand actually makes Saudi Arabia a very suitable place to build data centers. Data centers built outside Saudi Arabian cities can, through reasonable planning, reduce the negative impact on the environment to an imperceptible level, which makes it easier for companies to expand the scale of their data centers and improve their ability to meet global demand.

Of course, Saudi Arabia doesn't completely ignore the environment. Saudi Arabia plans to produce 9.5 million kilowatt - hours of renewable energy electricity by 2030, aiming to reduce its dependence on oil. The Saudi Ministry of Energy is responsible for 30% of the country's renewable energy production capacity target and will build power plants with installed capacities of 27.3 GW and 58.7 GW in 2024 and 2030 respectively. The Saudi PIF will be responsible for the remaining 70% of the renewable energy production capacity target. Saudi Arabia plans to build 16 new nuclear power plants before 2030, costing about $100 billion, with a total power generation of up to 22 GWh per year, which will account for 50% of the country's total power generation at that time.

In the strategic projects of Saudi Vision 2030, we can see the development of new energy, such as the Sakaka solar photovoltaic (PV) power plant project, the solar photovoltaic cell and component manufacturing plant, and the photovoltaic reliability laboratory.

Construction costs

In the construction of data centers, land, building materials, cooling equipment, and even backup generators are all factors to be considered. In the United States, building data centers cannot escape the currently rather tense tariff policies. People in the data center construction field said that the US tariff policies will drive up the construction, equipment, and operation costs of data centers.

Saudi Arabia also has relatively low construction costs. In addition, building data centers in the United States may also face complex and cumbersome procedures and high labor costs.

04

Can investment build up technological strength?

For Saudi Arabia, if it only becomes a gathering place for a large number of data centers, the final result may only be that it becomes a "country rich in computing power". Exporting computing power, just like exporting oil in the past, may not be the original intention of Saudi Vision 2030. After all, if it only has computing power, such an industry will be overly dependent on American chip products.

Therefore, Saudi Arabia is also strengthening its strength in the scientific research field.

In 2009, Saudi Arabia established the King Abdullah University of Science and Technology (KAUST), an international research - oriented university and the only public university in Saudi Arabia that offers only postgraduate education. KAUST provides scholarships for master's and doctoral students. These scholarships are set up for 16 academic programs, which can be classified into three departments: the Department of Biological and Environmental Science and Engineering, the Department of Computer, Electrical and Mathematical Science and Engineering, and the Department of Physical Science and Engineering.

Recently, a research team from KASUT designed a vertically - stacked semiconductor chip with 41 layers, about 10 times the height of previously manufactured chips. The layers are separated by insulating materials. The team made 600 chips with similar performance and reliable functions and used some of the stacked chips to achieve some basic operations required by computers or sensing devices. The performance of these stacked chips is comparable to that of some unstacked traditional chips.

The team said that the energy consumption required to manufacture these stacked layers is much lower than that of traditional chip - manufacturing methods. This new type of chip is not for use in supercomputers but is more suitable for common devices such as smart home appliances and wearable health devices to reduce the carbon footprint of the electronics industry. At the same time, each additional layer can provide more functions.

KAUST's strategic focus is to transform research into economically - viable innovations. To this end, the university established the National Institute for Transformation and Application; reorganized its research institutions according to the country's priorities in research, development, and innovation; and set up a deep - tech innovation fund with a budget of about 750 million Saudi riyals.

05

Final words about Saudi Arabia

In 2024, Saudi Arabia's GDP reached $1.09 trillion, and its tourism market also witnessed rapid growth. It is expected to reach $110.1 billion by 2033, with an average annual compound growth rate of 8.4% from 2024 to 2033. The "Global Innovation Index 2024" released by the World Intellectual Property Organization shows that among 133 countries (regions), Saudi Arabia ranks 47th overall, rising one place compared to the previous year.

In recent years, investing in Saudi Arabia has become a popular project in China. Many Chinese technology companies have also entered the Saudi market to conduct business.

Where there are opportunities, there are also risks. A person with business in the Middle East told reporters that many investment projects in Saudi Arabia, especially those from Chinese investors, are more talk than action. Everyone claims to know the royal family, but in the end, the projects come to nothing. So, if you want to invest in Saudi Arabia, you still need to be cautious.

This article is from the WeChat official account "Semiconductor Industry Insights" (ID: ICViews). The author is Liu Qian. It is published by 36Kr with permission.