Saudi Arabia is using its massive oil wealth to position itself as a major hub for AI data centers, with officials pitching the kingdom as an ideal location due to its energy resources, global location, and available land. At the Future Investment Initiative Institute, also known as “Davos in the desert,” Yasir Al Rumayyan, chairman of Saudi’s sovereign wealth fund, called on tech companies to build data centers in the kingdom for training and running new AI systems.
The kingdom’s push for AI was well-received by Wall Street and Silicon Valley leaders attending the summit, with Eric Schmidt, Alphabet’s former executive chairman, endorsing Saudi Arabia’s potential as a key player in AI. Schmidt highlighted the country’s advantages in terms of energy and infrastructure, suggesting that Saudi Arabia could become a major player in the AI sector if investments are made wisely and quickly.
Saudi Arabia recently signed a deal with Google to bring AI chips to its data center in the kingdom, following Oracle’s $1.5 billion investment in a data center in the country. The demand for energy to power new AI data centers has led to a flurry of infrastructure investments worldwide, with major companies like Microsoft and Amazon making significant moves in the space.
The kingdom asserts that it can offer power at a lower cost compared to data centers in the United States, with plans to generate electricity at competitive rates from gas and renewable sources. Saudi’s ambitious goal to build 130 gigawatts of renewable energy by 2030 could further solidify its position as a destination for green data centers, although significant progress is still needed to reach this target.
Saudi Arabia’s AI ambitions may see it competing with other Gulf nations like Abu Dhabi, which also have aggressive plans for AI development. Both countries face challenges in accessing advanced chips from American companies due to export controls imposed by the Biden Administration. Despite these hurdles, Saudi continues to attract investments and partnerships in the AI sector.
While the kingdom has scaled back on external projects like anchoring SoftBank’s vision fund and overseas investments due to budget constraints, the focus has shifted towards domestic initiatives and partnerships. The annual summit in Riyadh drew thousands of attendees seeking opportunities to co-invest with the Saudi wealth fund, signaling a shift in how the kingdom approaches funding for various ventures.
Overall, the Future Investment Initiative Institute in Saudi Arabia showcased the kingdom’s ambitions to become a global player in AI and technology, with a focus on leveraging its energy resources, infrastructure, and competitive advantage in electricity costs. As Saudi Arabia positions itself as a hub for AI data centers, collaborations with major tech companies and ongoing investments in renewable energy will be key factors in realizing its vision for the future.
