Saudi Arabia Data Center Market Size, Investment, Insights & Trends 2025-2033

Saudi Arabia Data Center Market Overview

Market Size in 2024: USD 2.1 Billion

Market Size in 2033: USD 7.7 Billion

Market Growth Rate 2025-2033: 15.6%

According to IMARC Group's latest research publication, "Saudi Arabia Data Center Market Report by Data Center Size (Large, Massive, Medium, Mega, Small), Tier Type (Tier 1 and 2, Tier 3, Tier 4), Absorption (Non-Utilized, Utilized), and Region 2025-2033", the Saudi Arabia data center market size reached USD 2.1 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 7.7 Billion by 2033, exhibiting a growth rate (CAGR) of 15.6% during 2025-2033. 

Growth Factors in the Saudi Arabia Data Center Market

• Government Initiatives and Vision 2030

Saudi Arabia’s government is all-in on turning the Kingdom into a digital powerhouse, and data centers are a cornerstone of this push. Vision 2030 and the National Transformation Program are driving massive investments in digital infrastructure, with the Saudi Data and Artificial Intelligence Authority (SDAIA) leading the charge. For example, over $500 billion is earmarked for projects like NEOM, which includes cutting-edge data centers to support its smart city ambitions. The Cloud Computing Regulatory Framework (CCRF) simplifies compliance for operators, attracting global players. Currently, around 24 colocation data centers are operational, with Riyadh hosting 80% of the capacity. These policies, paired with incentives like reduced electricity rates at 4.8 cents per kWh, are making Saudi Arabia a magnet for data center investments.

• Surge in Cloud and AI Adoption

The explosive growth of cloud computing and AI is fueling demand for data centers in Saudi Arabia. Companies like Amazon Web Services, Microsoft Azure, and Oracle are pouring billions into new cloud regions, with investments totaling around $10 billion. The rise of e-commerce, fintech, and telecom—generating massive datasets—requires robust storage and processing power. For instance, 5G adoption across 51 cities is driving data traffic, with over 70% of businesses now using cloud-based solutions for scalability. The National Strategy for Data and AI (NSDAI) encourages firms to leverage big data, with applications in healthcare and retail needing low-latency infrastructure. This surge is pushing data center operators to scale up, with major players like Gulf Data Hub planning facilities to handle hundreds of megawatts.

• Strategic Location and Connectivity

Saudi Arabia’s geographic sweet spot at the crossroads of Europe, Asia, and Africa makes it a prime hub for data centers. The 2Africa subsea cable, spanning over 27,950 miles, connects the Kingdom to global markets, boosting data transfer speeds. Inland connectivity improvements, like fiber networks, support high-bandwidth needs. Riyadh alone accounts for 70% of large data center facilities, with Jeddah and Dammam also growing as hubs. This connectivity draws hyperscalers like Google and Microsoft, who are building facilities to serve a vast, interconnected market. The Kingdom’s energy advantage—electricity costs 30-50% below the global average at $0.08 per kWh—further sweetens the deal. This strategic edge is driving investments, with over 784 MW of power capacity planned for new facilities.

Key Trends in the Saudi Arabia Data Center Market

• Rise of Energy-Efficient Data Centers

Sustainability is a big deal in Saudi Arabia’s data center market, driven by the need to cut costs and align with global green goals. Operators like Khazna and STC are adopting solar energy and liquid cooling, reducing energy use by up to 20% in some facilities. The NEOM Green Hydrogen Project, for instance, aims to power data centers with renewable energy, supporting Vision 2030’s sustainability targets. Over 60% of new facilities are being built to Tier III standards, prioritizing efficiency and reliability. With electricity costs at 4.8 cents per kWh, green tech makes financial sense too. This trend is attracting eco-conscious investors, with companies like Equinix aiming for carbon-neutral operations, setting a new standard for data centers in the Kingdom.

• Growth of Edge Data Centers

Edge data centers are popping up to meet the demand for low-latency processing, especially with 5G and IoT booming. These smaller facilities bring computing closer to users, cutting data transfer times by up to 50%. For example, Saudi Telecom Company (STC) is deploying edge centers in Riyadh to support smart city projects, handling real-time data for applications like autonomous vehicles. The edge market is already worth over $150 million, with major players like Mobily investing in facilities to support IoT devices, which number in the millions across the Kingdom. This trend is critical for industries like healthcare, where wearables generate sensitive data needing fast, secure processing, driving demand for localized infrastructure.

• AI-Optimized Infrastructure

AI is reshaping Saudi Arabia’s data center landscape, with facilities being upgraded to handle high-density computing. The HUMAIN-NVIDIA partnership, involving 18,000 NVIDIA GB300 chips, is a game-changer, building AI factories for advanced analytics. Data centers are now equipped with GPU clusters, boosting processing power for AI workloads in finance and healthcare. For instance, over 40% of new data centers are designed for AI and big data, with companies like EDGNEX planning 500 MW of AI-ready capacity. The National Strategy for Data and AI (NSDAI) is pushing this trend, with applications like predictive modeling needing low-latency access. This shift is driving billions in investments, as operators race to meet the Kingdom’s AI ambitions.

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Saudi Arabia Data Center Industry Segmentation:

The report has segmented the market into the following categories:

Breakup by Data Center Size:

• Large
• Massive
• Medium
• Mega
• Small

Breakup by Tier Type:

• Tier 1 and 2
• Tier 3
• Tier 4

Breakup by Absorption:

• Non-Utilized
• Utilized

Breakup by Region:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

Competitive Landscape:

• Detecon Al Saudia DETASAD Co. Ltd.
• Electronia
• Gulf Data Hub
• Mobily
• NashirNet
• NourNet
• Sahara Net
• Shabakah Integrated Technology
• Systems of Strategic Business Solutions

Future Outlook

Saudi Arabia’s data center market is on track to become a global heavyweight, fueled by Vision 2030 and a tech-hungry economy. With investments expected to hit billions, projects like NEOM and LEAP Riyadh 2025 are set to supercharge growth, potentially adding over 1,000 MW of capacity. Hyperscalers like AWS and Microsoft are doubling down, while local players like Gulf Data Hub plan facilities with 320 MW under development. The Kingdom’s low energy costs and strategic location will keep attracting global tech giants. However, challenges like data sovereignty laws and cybersecurity risks need addressing to maintain momentum. With 80% of capacity in Riyadh and new hubs in Jeddah and Dammam, the market is poised for explosive growth, cementing Saudi Arabia’s role as a digital leader.

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Research Methodology:

The report employs a comprehensive research methodology, combining primary and secondary data sources to validate findings. It includes market assessments, surveys, expert opinions, and data triangulation techniques to ensure accuracy and reliability.

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