Saudi Arabia is positioning itself as a major hub for AI data centers, utilizing its energy resources, global location, and available land. At the Future Investment Initiative Institute, the kingdom made a strong pitch to tech companies to build the massive data centers needed to train and run new AI systems. This initiative was well received by Wall Street and Silicon Valley power brokers, with Alphabet’s former executive chairman, Eric Schmidt, endorsing Saudi Arabia’s potential to become a key player in the AI space.
A deal was signed with Google to bring its new AI chips to a data center in the kingdom, with Oracle already having a $1.5 billion data center in the country. The demand for energy to fuel AI data centers has led to significant infrastructure investments globally, including nuclear deals and other renewable energy projects. Saudi officials claim they can offer power at a lower cost than the average in the United States, making it an attractive location for building data centers.
To deliver on its pitch, Saudi Arabia aims to build 130 gigawatts of renewable energy by 2030, a significant increase from its current capacity. The kingdom’s AI ambitions could also lead to competition with neighboring Gulf nations like Abu Dhabi, which has its own AI plans. Both countries face challenges in accessing advanced chips from American companies due to export controls.
Despite a shift away from massive external projects, the Saudi wealth fund continues to attract investors and partners for various initiatives. The annual summit in Riyadh drew thousands of participants interested in collaborating with the kingdom on investments in startups, sports events, and other ventures. The theme of AI dominated discussions at the summit, where AI avatars replaced clunky robots to facilitate conversations on technology and investment opportunities.
The PIF’s focus on co-investing with partners reflects a shift in its investment strategy, moving away from large external projects. With oil prices and overseas investments facing challenges, Saudi Arabia is reevaluating its spending priorities. However, the kingdom’s push to become a major player in the AI space through investments in data centers and other infrastructure projects continues to drive interest from tech companies and investors globally.
