Data Centers in Saudi Arabia
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Explore Markets in Saudi Arabia
Saudi Arabia – Powering Digital Expansion in the Middle East
Executive Summary
Saudi Arabia is a critical market for any business targeting the rapidly expanding digital economy of the Middle East. Establishing a presence here provides low-latency access to the Gulf region, satisfying data residency requirements and securing a foothold in a country aggressively investing in digital transformation. This strategic position enables faster service delivery and enhanced security for customers across the GCC.
Saudi Arabia: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Improving international links but with a developing local peering ecosystem. |
| Direct Cloud On-Ramps | Over 2 — as of September 2025 | Includes direct access to Oracle Cloud and other major providers. |
| Power Cost | SAR 0.18 – 0.25 / kWh (estimated) | Competitive pricing in the region for industrial power consumption. |
| Disaster Risk | Low (2.4 / 10) — as of September 2025 | Primary risks are environmental, such as drought and regional flooding. |
| Tax Incentives | Yes | Includes a $200M fund to support high-tech investment projects. |
| Sales Tax | 15% VAT — as of September 2025 | The standard Value Added Tax rate for goods and services. |
Network & Connectivity Ecosystem
Saudi Arabia's connectivity landscape is expanding quickly, driven by national investment and the arrival of hyperscale cloud providers. The market is moving toward greater carrier neutrality and more diverse interconnection options.
Carrier Density & Carrier Neutrality Carrier availability is growing, with multiple national and international providers present in key data centers as of September 2025. Facilities in Riyadh and Jeddah offer the most diverse options for creating resilient, multi-carrier network architectures.
Direct Cloud On-Ramps The market features 2 direct cloud on-ramps providing access to 2 cloud regions, as of September 2025. This enables dedicated, high-performance connectivity to providers including Oracle Cloud, bypassing the public internet for better security and reliability.
Internet Exchange Points (IXPs) The Saudi Arabian Internet Exchange (SAIX) is the primary IXP, facilitating local traffic peering and reducing latency for domestic users. Efficient local peering improves end-user experience by keeping domestic traffic within the country's borders.
Bare Metal Bare metal server options are available from providers like Hivelocity and phoenixNAP, offering dedicated compute for performance-sensitive workloads. These services allow for direct hardware access without a hypervisor layer, ideal for demanding applications.
Power Analysis
Saudi Arabia's energy infrastructure is a key asset for the data center industry, offering reliable and competitively priced power. The grid is dominated by fossil fuels, ensuring consistent supply for mission-critical operations.
Average Cost Of Power Power costs for industrial use are estimated to be between SAR 0.18 – 0.25 / kWh, as of September 2025. This competitive pricing structure supports cost-effective operations for high-density deployments.
Power Grid Reliability The power grid in major metropolitan areas like Riyadh and Jeddah is well-engineered and reliable. Data centers in these corridors are typically fed by redundant substations to ensure high levels of uptime for critical digital infrastructure.
Market Access, Business & Tax Climate
The Kingdom's business climate is increasingly favorable for technology investment, supported by government initiatives aimed at economic diversification and digital transformation under Saudi Vision 2030.
Proximity To Key Business Districts Data centers are strategically located near the key economic hubs of Riyadh, Jeddah, and Dammam. This provides low-latency connectivity to the nation's financial, logistics, and energy sectors, which are all undergoing rapid digitalization.
Regional Market Reach From a base in Saudi Arabia, businesses can effectively serve the entire Gulf Cooperation Council (GCC) market. This includes the UAE, Kuwait, Qatar, Bahrain, and Oman, as well as other parts of the Middle East and North Africa.
Tax Advantage For Data Centers The government actively encourages high-tech investment through various programs, including a significant national investment fund. This national focus on technology creates a favorable business environment for companies establishing digital infrastructure in the country.
Natural Disaster Risk
Saudi Arabia has a Low overall natural disaster risk profile, with an INFORM Risk score of 2.4 out of 10, as of September 2025. The risk profile is dominated by environmental factors rather than catastrophic events.
The primary natural hazards to consider for infrastructure planning are:
- Drought
- River Flooding
- Coastal Flooding
- Earthquake (low risk)
The country faces no material risk from tropical cyclones or tsunamis. Careful site selection can mitigate the moderate risks associated with flooding in specific coastal or river-adjacent areas.
