Saudi Arabia Wants to Host the World’s Cheapest Data Centres

The kingdom is positioning itself as the ultimate destination for affordable, scalable digital infrastructure. With massive investments flowing into the Saudi Arabia data centre expansion, the country aims to transform how businesses approach cloud computing and AI workloads. But can Saudi Arabia really deliver low-cost data centres that compete globally?

This aggressive push comes at a time when data centre costs are soaring worldwide. Companies are desperately seeking alternatives that won’t drain their budgets while still delivering top-tier performance.

The Vision Behind Saudi Arabia’s Data Centre Ambition

Saudi Arabia isn’t just building data centres—it’s engineering an entirely new digital ecosystem. The kingdom wants to become the Middle East’s undisputed technology hub, attracting global tech giants and startups alike.

The strategy is straightforward: leverage abundant renewable energy resources, favorable land costs, and strategic geographic positioning to offer data centres in Saudi Arabia at prices competitors can’t match. This isn’t about undercutting the market temporarily. It’s about fundamentally reshaping the economics of digital infrastructure.

Why the focus on affordability?

Cost remains the biggest barrier for businesses scaling AI operations and cloud services. Traditional data centres in Europe and North America charge premium rates that smaller companies simply can’t afford. Saudi Arabia sees this gap and is racing to fill it with competitive pricing structures that could disrupt the entire industry.

stc Group Signs 5-Year Agreement with Ericsson for Saudi Arabia’s Digital Infrastructure

STC Subsidiary Data Centres Leading the Charge

At the heart of this transformation is center3, a subsidiary of Saudi telecom giant STC Group. The company isn’t approaching this alone—it’s partnered with Humain, an AI company backed by Saudi Arabia’s Public Investment Fund.

The STC Data Centre Project Details

The collaboration between center3 and Humain represents one of the most ambitious tech infrastructure projects in the region. Their joint venture plans to develop facilities capable of hosting up to 1 gigawatt of AI workload capacity.

Think about what that means. We’re talking about infrastructure that can power thousands of AI models simultaneously, process massive datasets, and support next-generation applications that haven’t even been invented yet.

“This joint venture with Humain reinforces our commitment to enabling the region’s digital future,” said Olayan Alwetaid, chief executive of STC Group. The companies are focused on creating foundations that can handle tomorrow’s computational demands, not just today’s requirements.

The Humain Data Centre Partnership: More Than Just Infrastructure

Humain brings something unique to the table—deep expertise in artificial intelligence and agentic operating systems. This isn’t your typical data centre builder. They understand the specific requirements that AI workloads demand: high-performance computing, efficient cooling systems, and resilient infrastructure that never goes down.

“AI at scale requires purpose-built compute, efficiency and resilience,” explained Tareq Amin, chief executive of Humain. “Infrastructure capable of meeting the most demanding workloads while designed to support future advancements.”

The partnership has already begun forming strategic alliances with major players like EY, Groq, and Replit to develop AI skills across Saudi Arabia. This comprehensive approach—building both infrastructure and talent—sets the kingdom apart from competitors who focus solely on hardware.

Key advantages of the partnership include:

Specialized AI infrastructure designed from the ground up
Integration with Saudi Arabia’s national AI development initiative
Access to Public Investment Fund resources for scaling
Strategic location connecting Europe, Asia, and Africa

How Low-Cost Data Centres Saudi Arabia Could Change the Game

The promise of low-cost data centres Saudi Arabia is making goes beyond attractive pricing. The kingdom has several structural advantages that could make this vision a reality.

Energy Economics

Saudi Arabia benefits from some of the world’s cheapest energy costs. While European and American data centres struggle with skyrocketing electricity bills, Saudi facilities can tap into abundant renewable resources and traditional energy at fraction of the price.

Data centres consume enormous amounts of power. Reducing energy costs by even 20-30% translates to massive savings over the facility’s lifetime. These savings get passed directly to customers in the form of competitive pricing.

Strategic Geographic Position

Center3 is deliberately positioning Saudi Arabia as a data connectivity hub linking three continents. Companies serving Middle Eastern, African, and Asian markets can reduce latency dramatically by hosting operations in the kingdom rather than distant European or American data centres.

Lower latency equals better user experiences. Better experiences mean higher customer satisfaction. It’s that simple.

Government Support and Investment

The Saudi government views digital infrastructure as crucial to its Vision 2030 economic diversification plan. This means favorable regulations, tax incentives, and significant public investment flowing into the sector.

According to the World Bank, Saudi Arabia and the UAE are emerging as regional and even global leaders in AI readiness, driven by substantial investments in data centres and high-performance computing systems.

Saudi Arabia Cloud Infrastructure: Building for Tomorrow

The kingdom’s ambitions extend far beyond affordable hosting. Saudi Arabia cloud infrastructure development focuses on creating a complete digital ecosystem that rivals established technology hubs.

This includes:

Developing local tech talent through partnerships with universities
Attracting international technology companies to establish regional headquarters
Creating special economic zones with favorable business conditions
Investing in fiber optic networks and 5G infrastructure

The goal isn’t to be the cheapest option—it’s to be the best value proposition combining price, performance, and strategic advantages.

Saudi Arabia Digital Infrastructure: The Broader Picture

Data centres represent just one piece of a larger puzzle. The kingdom is simultaneously investing in telecommunications networks, smart city projects, and digital government services.

This holistic approach creates powerful synergies. Companies establishing data centre operations in Saudi Arabia can tap into advanced connectivity infrastructure, skilled local workforces, and a rapidly growing consumer market hungry for digital services.

The numbers tell a compelling story:

Planned capacity: 1 gigawatt of AI workload
Connectivity: Linking Europe, Asia, and Africa
Investment: Backed by sovereign Public Investment Fund
Timeline: Aggressive development schedule to meet growing demand

Challenges and Competition

Despite the ambitious vision, Saudi Arabia faces significant challenges. Established players like Amazon Web Services, Microsoft Azure, and Google Cloud have decades of experience, massive existing infrastructure, and deep customer relationships.

Can Saudi Arabia cheapest data centres really compete with these tech giants?

The answer likely depends on execution. Building infrastructure is one thing. Operating it efficiently, maintaining uptime, and providing exceptional customer service requires sustained excellence over years.

Regional competitors aren’t standing still either. The UAE is building what it claims will be the world’s biggest data centre, while Qatar recently established Qai, an AI company investing in infrastructure domestically and internationally.

What This Means for Businesses

For companies evaluating their cloud and data centre strategies, Saudi Arabia’s emergence as a serious contender creates new options. Businesses serving Middle Eastern markets should particularly pay attention to the cost savings and latency benefits.

Startups and mid-sized companies that can’t afford premium pricing from established providers might find exactly what they need in Saudi facilities. The key is ensuring these new data centres can deliver on their promises of reliability and performance.

The Path Forward

Saudi Arabia’s ambition to host the world’s cheapest data centres reflects a broader transformation sweeping through the kingdom. As oil revenues become less certain, digital infrastructure investments represent a bet on the future economy.

The STC data centre project and Humain data centre partnership demonstrate the seriousness of these ambitions. With massive resources, strategic advantages, and clear government support, Saudi Arabia has everything needed to succeed—except a proven track record.

That track record will be built over the coming years as these facilities come online and prove they can deliver on their promises. For businesses watching this space, the emergence of competitive low-cost data centres Saudi Arabia could represent a significant opportunity to reduce costs while accessing cutting-edge infrastructure.

The digital transformation race is accelerating. Saudi Arabia is making its move to become not just a regional player, but a global powerhouse in data centre hosting and cloud infrastructure. Whether the kingdom can achieve its ambitious vision of hosting the world’s most affordable, efficient data centres remains to be seen. But one thing is certain—the competition just got a lot more interesting.

Frequently Asked Questions

How many data centers are currently operating in Saudi Arabia?

Saudi Arabia currently has between 37-51 operational data centers, depending on the source and classification method. Major providers include center3 (STC subsidiary), Mobily, Gulf Data Hub, and DataVolt. The kingdom also hosts facilities from global tech giants like AWS, Microsoft, and Oracle.

But here’s what’s really exciting: the existing capacity of around 350 MW is just the beginning. With over 2.7 GW of additional capacity planned through upcoming projects, Saudi Arabia is rapidly expanding to become one of the region’s largest data centre hubs. Cities like Riyadh, Jeddah, Dammam, and the futuristic NEOM are leading this massive infrastructure buildout.

What is Saudi Arabia’s $500 billion project called?

The $500 billion megaproject is called NEOM—a futuristic smart city being built in northwest Saudi Arabia along the Red Sea coast. Launched in 2017 by Crown Prince Mohammed bin Salman as part of Vision 2030, NEOM spans 26,500 square kilometers (about the size of Belgium).

NEOM includes several revolutionary components: The Line (a 170km linear city housing up to 9 million people), Oxagon (the world’s largest floating industrial complex), Trojena (a mountain ski resort), and Sindalah (a luxury island destination). The entire city will run on 100% renewable energy and feature cutting-edge AI, robotics, and autonomous systems. While some aspects have been scaled back due to budget constraints, NEOM remains the centerpiece of Saudi Arabia’s economic diversification strategy, with significant portions expected to be operational by 2030.

Who is the CEO of Saudi Arabia’s AI company HUMAIN?

Tareq Amin serves as the CEO of HUMAIN, Saudi Arabia’s national AI champion company. Appointed in May 2025, Amin brings over 20 years of technology leadership experience to the role. He previously served as CEO of Aramco Digital and Rakuten Symphony, where he pioneered cloud-native network architectures.

Under Amin’s leadership, HUMAIN aims to become the region’s leading AI company, delivering full-stack AI solutions across infrastructure, cloud platforms, data models, and applications. The company is backed by Saudi Arabia’s Public Investment Fund and chaired by Crown Prince Mohammed bin Salman himself. Amin was even named to TIME’s 100 Most Influential People in AI 2025 list for his work positioning Saudi Arabia as a global AI powerhouse through strategic partnerships with Nvidia, AWS, AMD, and other tech leaders.

What are the newest data center projects announced in Saudi Arabia?

Several major data center projects have been announced recently. In December 2024, STC’s subsidiary center3 partnered with HUMAIN to build facilities capable of hosting up to 1 gigawatt of AI workload capacity—one of the most significant infrastructure announcements for the kingdom.

Other recent projects include Amazon AWS’s $5.3 billion investment to launch a cloud region by 2026, Microsoft’s completion of three data centers in the Eastern Province (opening 2026), and the Desert Dragon data center by ICS Arabia with 187 MW capacity starting in Riyadh in March 2026. NEOM and DataVolt also signed an agreement in January 2025 to develop sustainable data centers in Oxagon. Even Elon Musk’s xAI announced a massive 500-megawatt data center partnership with HUMAIN in November 2025. These investments position Saudi Arabia to add over 500 MW of capacity by the end of 2025 alone, with billions more flowing into the market through 2030.

References:

Saudi Arabia Wants to Host the World’s Cheapest Data Centres

The Vision Behind Saudi Arabia’s Data Centre Ambition