Data Centers in Riyadh
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Riyadh – Strategic Gateway to the Middle East
Executive Summary
Riyadh is the primary digital hub for any organization targeting Saudi Arabia and the broader Gulf region. Establishing infrastructure here provides low-latency access to a rapidly expanding economy, which is critical for delivering modern digital services and capturing revenue in line with the nation's Vision 2030 initiative.
Riyadh: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Strong regional links, with improving international connectivity. |
| Direct Cloud On-Ramps | 0 — as of September 2025 | Nearest on-ramps are in the UAE. Private network extensions are available. |
| Power Cost | SAR 0.18 - 0.25/kWh (est.) | Competitive power pricing supports large-scale and high-density deployments. |
| Disaster Risk | Low (2.4/10) — as of September 2025 | Primary risks are related to heat and drought; minimal seismic activity. |
| Tax Incentives | Yes | A national fund supports high-tech projects, including digital infrastructure. |
| Sales Tax | 15% VAT — as of September 2025 | Standard Value Added Tax applies to most goods and services. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Riyadh is served by ~20-30 national and regional carriers as of September 2025. The market features carrier-neutral facilities that provide diverse connectivity options for redundancy and cost management.
Direct Cloud On-Ramps: Direct public cloud on-ramps are not yet established within Riyadh as of September 2025. The primary access points for the region are located in the UAE. Businesses typically use private network interconnects, such as dedicated circuits or IP-VPNs, to connect to major cloud provider regions.
Internet Exchange Points (IXPs): The Saudi Network Internet Exchange (SAUDIX) is the main peering point in the country. Its presence in Riyadh improves local traffic exchange and reduces latency for users within the Kingdom.
Bare Metal: Bare metal services are available from multiple providers specializing in on-demand compute. Options include global players like Hivelocity and Leaseweb, enabling dedicated server deployments without large capital investment.
Power Analysis
Average Cost Of Power: The estimated cost for industrial power in Riyadh ranges from SAR 0.18 to SAR 0.25/kWh as of September 2025. This competitive pricing structure makes high-density computing workloads financially viable.
Power Grid Reliability: The power grid serving Riyadh's main commercial and industrial zones is well-engineered and reliable. Data centers in the area are supported by redundant power feeds from multiple substations to ensure high levels of uptime.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Riyadh are strategically located to serve the King Abdullah Financial District (KAFD) and other major commercial hubs. This proximity provides low-latency connectivity for financial services, government, and corporate enterprise customers.
Regional Market Reach: From Riyadh, organizations can effectively serve the entire population of Saudi Arabia, the largest market in the GCC. The central location also provides a solid base for reaching other Gulf markets like Bahrain, Kuwait, and Qatar.
Tax Advantage For Data Centers: Saudi Arabia offers significant investment support for high-technology projects through a national fund. This initiative helps reduce the financial barriers for companies establishing digital infrastructure in the country.
Natural Disaster Risk
Riyadh has a low overall risk profile for natural disasters, with an INFORM Risk score of 2.4 out of 10 as of September 2025. The primary environmental hazards to consider are drought (5.0/10) and the potential for river flooding (4.8/10). Seismic risk is minimal, with an earthquake score of 1.8/10.
