blog post

Booming Middle East

Saudi Arabia and the UAE are intensifying efforts to build their technological infrastructure, aiming to become the predominant AI power in the region, while HP scratches for power in a region they once dominated.

No one fully anticipated data centers would become a key asset in he AI god rush and geo-politics have changes lot since then.

One of the four humongous data centers in the UAE operated by Equinix Inc., based in Redwood City, California, which is also considering expansion into neighboring Saudi Arabia.

The competition between the Gulf States is palpable in a nondescript building located in an industrial park near Dubai’s outskirts, next to a golf course. This windowless, impeccably clean facility, which opened in September, represents the latest in high-tech environments designed to protect sensitive equipment from the harsh desert conditions outside.

The Digital Desert

Both Saudi Arabia and the UAE are keen on harnessing the power of AI, propelling the construction of high-cost data centers in the desert. These facilities are crucial not only for technological advancement, being close to customers for better service and faster access, but also for geopolitical reasons, ensuring that the data remains under local jurisdiction and safe from foreign interference.

There is also a new determined threat from China to dominate the global and increasingly hegemony over intelligence and data.

In Saudi Arabia, AI technology forms a key part of Crown Prince Mohammed bin Salman’s Vision 2030, which seeks to diversify the economy beyond oil. The kingdom has initiated significant AI research centers and ministries and is developing technologies akin to OpenAI Inc.’s ChatGPT, much like the UAE.

Both nations are also accumulating specialized computing hardware at a rapid pace. A recent report highlights discussions between OpenAI’s CEO, Sam Altman, and UAE officials on fostering large-scale AI infrastructure through private sector collaboration.

Saudi Arabia and the UAE, however, still trail behind Western Europe in terms of data center capacity. By the end of 2023, UAE had 235 megawatts and Saudi Arabia 123 megawatts, in stark contrast to Germany’s 1,060 megawatts. Plans are underway in both countries to significantly increase their capacities in the coming years.

The economic implications are substantial, with AI predicted to add $96 billion to the UAE’s economy and $135 billion to Saudi Arabia’s by 2030. Despite official denials of any rivalry, industry observers often point to a competitive undercurrent between the two nations.

Modern Oil

The UAE boasts an earlier start in data center development, beginning over two decades ago with the Dubai Internet City initiative. Today, it has 52 data centers in operation. Its tech conglomerate, G42, is pushing the envelope with partnerships aimed at developing cutting-edge computing technologies.

Conversely, Saudi Arabia has a growing number of data centers with diverse international involvement, including major Chinese tech firms. Yet, the country faces challenges related to its political climate and stringent cybercrime and data protection laws, which have sometimes hindered collaboration with global tech giants.

Both countries are exploring incentives like energy subsidies to attract foreign tech firms and investments, aiming to enhance their digital infrastructure and ease the process for international partners.

The overarching challenge in the region is the physical environment—managing the intense heat and energy consumption of advanced computing facilities necessary for AI development. Innovations like liquid and immersion cooling are being explored to address these issues, though they come with their own sets of challenges, especially in regions where technical expertise may be scarce. Just as they are everywhere.

As the Gulf States build out their tech ecosystems, their growth will be challenged by Equinix’s newest facility in the UAE, and advertising that will be used as a standing testimony to superior hardware and engineering.

None of it is true, it’s the Chinese way. But is a testament to these ongoing efforts, situated in a region poised for significant technological advancements yet facing the realities of rapid, large-scale development in challenging conditions.

The leading question among many is whether the western world is are we willing to look the other way while guzzling megatons of computing from these centers, so as to avoid confronting the violent and impossibly difficult human conditions, pay scales, hours, and treachery that part of the world will create?

And if a GO decision is made, will we be willing spend the hundreds of millions to build private vs, shared data centers, just so that the probability of the data we know is more secure?

It is good for the Sauds tough. A tall and narrow stripe of a city more than 105 miles long, teeming with 9 million residents and running entirely on renewable energy — that’s the vision Saudi Arabia’s leaders have for The Line, part of a “giga-project” that will reshape the kingdom’s northwest.

Newly revealed design concepts show a futuristic walled city — its open interior is enclosed on both sides by a mirrored façade — stretching from the Red Sea eastward across the desert and into a mountain range.

Perhaps if we could also vision projects of similar magnitude with trusted local partners, for both implementation and training, it would.  


Steve King

Senior Vice President, CyberEd

King, an experienced cybersecurity professional, has served in senior leadership roles in technology development for the past 20 years. He began his career as a software engineer at IBM, served Memorex and Health Application Systems as CIO and became the West Coast managing partner of MarchFIRST, Inc. overseeing significant client projects. He subsequently founded Endymion Systems, a digital agency and network infrastructure company and took them to $50m in revenue before being acquired by Soluziona SA. Throughout his career, Steve has held leadership positions in startups, such as VIT, SeeCommerce and Netswitch Technology Management, contributing to their growth and success in roles ranging from CMO and CRO to CTO and CEO.

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