Saudi Arabia is making bold moves in its quest to become a global leader in digital infrastructure. The Kingdom is currently in discussions to develop a massive data center at Oxagon, with an estimated investment of $12.8 billion. Oxagon is a key part of the futuristic NEOM city, a visionary project launched in 2017 and situated in the Tabuk Province.
The proposed data center will feature a capacity of 1 gigawatt (GW), a major step forward in Saudi Arabia’s efforts to strengthen its digital infrastructure. This ambitious project is part of a broader strategy to expand the country’s data economy, as outlined by Ali Raza, Chief Investment Officer at Saudi Arabia Holding Co.
A Growing Data Economy
Oxagon is just one piece of a larger puzzle aimed at positioning Saudi Arabia as a regional leader in data storage and cloud services. Other notable projects include:
- Pure Data Centres Group and Dune Vaults: Both are focused on building data centers with similar 1GW capacities.
- DataVolt’s $5 Billion Collaboration with Center3: A strategic partnership aimed at expanding cloud and data storage solutions to meet the growing demand in the region.
- ServiceNow’s $500 Million Investment: Establishing a regional headquarters in Riyadh and building two data centers to support the Kingdom’s digital ecosystem.
- Zoho Corp’s $133 Million Investment: Building two additional data centers in Riyadh and Jeddah to enhance cloud services and data infrastructure.
These initiatives reflect Saudi Arabia’s commitment to becoming a digital powerhouse, with a focus on expanding its data capabilities and supporting future technology-driven innovations.
The 5G Advantage and Rising Demand for Data Infrastructure
The demand for data infrastructure in Saudi Arabia is set to grow exponentially in the coming years. A significant driver of this growth is the continued rollout of 5G coverage across the Kingdom. With more than 50% of Saudi Arabia already covered by 5G, and this coverage continuing to expand, the Kingdom is positioning itself to support bandwidth-heavy applications such as augmented reality (AR), virtual reality (VR), autonomous vehicles, and Internet of Things (IoT) systems.
Taimoor Ahmed Chaudhary, Business Manager for Islamic Banking at Allied Bank Limited, highlights, “With 5G on the rise, Saudi Arabia will be able to power next-generation applications that require large amounts of data processing and low latency.”
According to estimates, the data traffic per smartphone in Saudi Arabia is expected to rise sharply from 5GB in 2023 to 18.7GB by 2029. This rapid increase in data consumption will further accelerate the need for high-capacity data centers capable of supporting this growth.
Gaming, Esports, and IoT: Catalysts for Data Growth
Gaming and esports are also significant contributors to the growing demand for data infrastructure. Saudi Arabia is planning a $500 million esports city, further fueling the need for advanced data processing and storage capabilities. Real-time data, cloud services, and high-performance computing will be critical in supporting the esports and gaming sectors, both of which are expected to continue expanding rapidly.
In addition, the Saudi government’s continued investment in IoT (Internet of Things) and edge computing technologies will increase demand for localized, high-capacity data centers. Companies like iot squared are already integrating these technologies into large-scale infrastructure projects to meet the needs of an increasingly connected world.
Global Tech Giants Invest in Saudi Arabia’s Data Future
Saudi Arabia’s data economy is also attracting significant investments from global tech giants. Oracle, for example, is expanding its cloud services with a $1.5 billion investment in Riyadh. Amazon Web Services (AWS) is committing a substantial $5.3 billion to boost regional infrastructure, while IBM has invested $250 million to establish a software lab in Riyadh. Though not a data center, this investment highlights the growing importance of the Kingdom’s digital transformation.
Saudi Arabia Poised for Leadership in Digital and Cloud Technologies
With these major investments and ongoing projects, Saudi Arabia is on track to become a regional leader in digital and cloud technologies. The Kingdom is laying the foundation for a thriving digital economy, setting the stage for future technological advancements that will impact not just Saudi Arabia, but the entire Middle East.
As Saudi Arabia’s digital economy continues to grow, there has never been a better time to expand your business in the Kingdom. Arab Dreams offers expert business setup services to help you navigate the opportunities in Saudi Arabia’s thriving tech and data infrastructure sectors.
