Riyadh – Sharikat Mubasher: Saudi Arabia’s data center market is entering a rapid growth phase, fueled by rising demand for hyperscale computing, cloud services, and artificial intelligence infrastructure, according to a recent study by Research and Markets. The sector was valued at $2.08 billion in 2025 and is projected to reach $6.16 billion by 2031, expanding at a compound annual growth rate of 19.84%.

The report says that Saudi Arabia consists of approximately 40 operational colocation data centers, of which 10 facilities are located in Dammam alone. While Dammam has traditionally served as a key hub due to its strong fiber connectivity, reliable power supply, and proximity to major industrial zones, new investments are increasingly spreading across the Kingdom. Cities including Riyadh, Jeddah, NEOM, Makkah, Madinah, Al Qassim, and Al Ahsa are attracting new data center projects as Saudi Arabia adopts a more distributed national digital infrastructure strategy.

At the same time, investment in AI-ready data centers is accelerating as demand for high-performance computing grows. In December 2025, center3, a subsidiary of stc, signed a memorandum of understanding with HUMAIN to develop several AI-ready data centers across the Kingdom. The initial phase aims to deliver around 250 megawatts of capacity, with plans to expand beyond 1 gigawatt in the longer term.

The expansion reflects Saudi Arabia’s broader digital transformation push under Vision 2030, which is driving investment in cloud computing, artificial intelligence, and Internet of Things technologies. Partnerships such as the collaboration between Telenor and stc to expand IoT connectivity across the Kingdom highlight the growing scale of the country’s digital infrastructure ambitions.