Saudi Arabia Data Center Services Market Insights: Market Landscape, Growth Drivers & Forecast

According to IMARC Group's latest research publication, the Saudi Arabia data center services market size reached USD 1.9 Billion in 2025. The market is projected to reach USD 6.6 Billion by 2034, exhibiting a growth rate of 14.67% during 2026-2034.

How AI is Reshaping the Future of Saudi Arabia Data Center Services Market

• Predictive Operations: AI algorithms monitor infrastructure health, predicting failures before they occur and reducing unplanned downtime by up to 30%, cutting operational costs significantly for hyperscale facilities.
• Smart Cooling Systems: Machine learning optimizes cooling efficiency in real-time, reducing energy consumption in massive facilities handling AI workloads by dynamically adjusting based on rack density and ambient conditions.
• Capacity Planning: Advanced analytics forecast demand patterns across different regions, enabling operators to optimize resource allocation for government, banking, and cloud hyperscaler clients requiring enterprise-grade availability.
• Security Enhancement: AI-powered threat detection systems protect critical infrastructure hosting sensitive data for BFSI and healthcare sectors, identifying anomalies and preventing cyber attacks through continuous monitoring and automated responses.
• Workload Optimization: Intelligent resource management distributes computing loads efficiently across colocation and managed hosting services, ensuring maximum utilization while maintaining service level agreements for diverse enterprise clients.

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How Vision 2030 is Revolutionizing Saudi Arabia Data Center Services Industry

Vision 2030 is fundamentally reshaping the data center services landscape by positioning the Kingdom as a regional digital hub. The government launched its National Data Center Strategy in June 2025 to accelerate cloud and AI infrastructure development across the country. Major investments are flowing into projects like NEOM's 1.5-gigawatt sustainable data center developed by DataVolt with $5 billion in initial funding. The Public Investment Fund established HUMAIN with plans to deploy 6 gigawatts of capacity, targeting 6% of global AI workloads. Competitive electricity tariffs set at 4.8 cents per kilowatt-hour for cloud operators, combined with abundant energy resources, make the Kingdom exceptionally attractive for hyperscale builds. Special economic zones offer 100% foreign ownership and full profit repatriation, drawing global giants like AWS, Microsoft, Google, and Oracle to establish local cloud regions. The National Strategy for Data & AI aims to attract $20 billion in AI investments and train 20,000 specialists, creating a robust ecosystem that directly fuels demand for enterprise-grade colocation and managed hosting services across government, banking, telecom, and manufacturing sectors.

Saudi Arabia Data Center Services Market Trends & Drivers:

The market is experiencing rapid transformation driven by massive hyperscale investments from global cloud providers establishing regional presences. AWS announced plans for a new cloud region launching in 2026, while Microsoft completed construction of three data centers with availability zones in the Eastern Province. Google partnered with Aramco to launch a dedicated cloud and data center region in November 2023. Oracle expanded from its initial Jeddah facility to open a second region in Riyadh. These hyperscaler deployments are creating enormous demand for both colocation space and managed hosting services from enterprises migrating workloads to the cloud. Center3 is expanding to 1 gigawatt of total capacity, while DAMAC's Edgnex division announced plans for 500 megawatts of future capacity during LEAP 2025. Gulf Data Hub partnered with KKR to support over $5 billion in total investment for hyperscale infrastructure. The colocation segment is seeing sustained growth as businesses seek carrier-neutral facilities with redundant power, advanced cooling, and high-speed interconnection rather than building proprietary infrastructure.

Digital transformation mandates across government ministries and public sector organizations are driving consistent baseline demand for Tier III and Tier IV certified facilities. Over 90% of government services have been digitized through platforms like Absher and Tawakkalna, requiring robust hosting infrastructure with guaranteed uptime. The Saudi Data and Artificial Intelligence Authority launched the Hexagon Data Center project in Riyadh as a Tier IV facility to support e-government services and strengthen national data sovereignty. Banking, financial services, and insurance sectors are migrating to managed hosting solutions at unprecedented rates, with digital banking licenses and open-API fintech sandboxes swelling transaction data volumes. Healthcare providers are implementing digital platforms for telemedicine and electronic health records, while manufacturing facilities adopt IoT sensors requiring edge computing capabilities. The IT and telecom vertical consumed over 55% of capacity as operators containerize core network functions and shift systems into cloud instances, creating multi-year contracts for colocation providers.

Strategic connectivity infrastructure is positioning the Kingdom as a regional gateway, with submarine cable systems connecting Europe, Asia, and Africa landing in Jeddah and Dammam. The location advantage enables sub-10 millisecond latency to major population centers across three continents, attracting content delivery networks and cloud service providers requiring low-latency access to emerging markets. Strong 5G rollout and fiber optic backbone expansions across Riyadh, Jeddah, and Dammam support edge computing deployments and high-density computing workloads. Sustainability initiatives are gaining traction, with operators integrating renewable energy sources and liquid immersion cooling technologies. XDS Datacentres signed agreements with ICS Arabia to deliver 10-megawatt immersion-cooled facilities in Riyadh and Jeddah by June 2026, featuring rack densities up to 368 kilowatts ideal for AI and GPU-intensive applications. NEOM projects emphasize green technology integration, while Oxagon's DataVolt development aims to minimize environmental impact through advanced energy-efficient architectures, aligning with both corporate ESG goals and national decarbonization commitments.

Saudi Arabia Data Center Services Market Industry Segmentation:

The report has segmented the market into the following categories:

Service Type Insights:

• Managed Hosting Services
• Colocation Service

Data Center Type Insights:

• Tier-I and II
• Tier-III
• Tier-IV

End User Industry Insights:

• BFSI
• Health Care
• Retail
• Manufacturing
• IT and Telecom
• Others

Regional Insights:

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

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

Recent News and Developments in Saudi Arabia Data Center Services Market

• February 2025: Equinix announced investment plans exceeding $1 billion to develop hyperscale data center infrastructure in Jeddah during LEAP 2025, with expected capacity of 100 megawatts targeting cloud, AI, and enterprise workloads.
• January 2025: NEOM and DataVolt signed agreements to develop a sustainable data center in Oxagon with 1.5-gigawatt capacity and initial investment of $5 billion, integrating advanced computing and energy-efficient technologies.
• December 2025: Saudi Telecom Company and HUMAIN announced a joint venture to develop and operate AI-focused data centers through subsidiary center3, with planned capacity reaching 1 gigawatt starting with 250 megawatts initial phase.
• December 2025: Al Moammar Information Systems was awarded a major contract by HUMAIN valued at approximately $500 million to design and construct private AI-focused data center infrastructure supporting advanced artificial intelligence workloads.

• November 2025: AWS and HUMAIN expanded partnership to provide and manage up to 150,000 AI accelerators in Riyadh's AI Zone facility, with AWS becoming HUMAIN's preferred global AI partner for compute and services delivery.

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