Data Centers in Saudi Arabia
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Saudi Arabia – Powering Digital Transformation in the Gulf
Saudi Arabia is rapidly emerging as the digital hub for the Middle East. With significant government investment in high-tech infrastructure and new hyperscale cloud regions, it is the prime market for enterprises needing to serve the Gulf Cooperation Council (GCC), North Africa, and beyond. Deploying here reduces latency and improves application performance, directly impacting user engagement and revenue in one of the world's fastest-growing digital economies.
Saudi Arabia: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Strong regional connectivity with growing international subsea cable links. |
| Direct Cloud On-Ramps | Over 2 — as of September 2025 | Direct access is available to major cloud providers, including Oracle Cloud. |
| Power Cost | SAR 0.18 – 0.25/kWh | Fossil fuels dominate the grid, keeping industrial power costs competitive. |
| Disaster Risk | Low (2.4/10) — as of September 2025 | Minimal exposure to significant natural disasters ensures high uptime. |
| Tax Incentives | Yes | A $200M fund supports high-tech projects, signaling strong government backing. |
| Sales Tax | 15% VAT — as of September 2025 | Standard Value Added Tax applies to services. |
Network & Connectivity Ecosystem
Saudi Arabia's connectivity landscape is undergoing a massive transformation, driven by both public and private investment. This creates a reliable environment for digital infrastructure.
Carrier Density & Carrier Neutrality: The market features over 2 providers, as of September 2025. Carrier-neutral facilities in major cities like Riyadh, Jeddah, and Dammam provide diverse connectivity options essential for building resilient network architectures.
Direct Cloud On-Ramps: With over 2 dedicated on-ramps, businesses can establish low-latency, private connections to 2 major cloud regions within the country. Direct access is available for Oracle Cloud, with connectivity to other major providers also present in the market.
Internet Exchange Points (IXPs): The primary exchange, Saudi Arabian Internet Exchange (SAIX), is central to routing domestic traffic efficiently. Peering at SAIX reduces reliance on international transit, lowering costs and improving performance for local users.
Bare Metal: Bare metal server providers are readily available for workloads demanding dedicated physical resources. Options include global providers like Hivelocity and phoenixNAP, offering direct access to the country's growing network infrastructure.
Power Analysis
The Kingdom's energy sector provides a stable and cost-effective foundation for data center operations.
Average Cost Of Power: Industrial electricity rates are competitive for the region, typically ranging from SAR 0.18 to SAR 0.25/kWh as of September 2025. This cost predictability is a significant advantage for managing the operational expenditures of power-intensive compute environments.
Power Grid Reliability: The national power grid is well-engineered, especially in the economic centers where data centers are located. Major facilities are supported by redundant power feeds from multiple substations, ensuring high levels of uptime for critical operations.
Market Access, Business & Tax Climate
Saudi Arabia's strategic initiatives, part of its Vision 2030 plan, have created an attractive environment for technology investment and digital business.
Proximity To Key Business Districts: Data centers are concentrated near Riyadh, the capital and financial center, and Jeddah, a major commercial port city. This proximity provides low-latency connectivity to the nation's largest enterprises in finance, logistics, and government.
Regional Market Reach: A deployment in Saudi Arabia effectively serves the entire Arabian Peninsula and can act as a strategic hub for North and East Africa. Its central location minimizes latency to a rapidly growing population of over 400 million people.
Tax Advantage For Data Centers: The government offers significant investment support for technology projects. The Saudi High-Tech Investment Fund encourages development in the sector, helping reduce the initial capital costs for new deployments and digital service platforms.
Natural Disaster Risk
Saudi Arabia has a very low risk profile for natural disasters, making it an inherently stable location for critical infrastructure.
The country has a Low risk rating, with an INFORM Risk score of 2.4 out of 10, as of September 2025. This score reflects minimal exposure to most major natural perils that could disrupt data center operations.
Primary environmental risks include:
- Drought: 5.0/10
- River Flood: 4.8/10
- Coastal Flood: 4.7/10
- Earthquake: 1.8/10
Risks from tsunamis and tropical cyclones are negligible. The primary considerations are engineered solutions for managing heat and potential, though infrequent, flooding events.
