Saudi Arabia Data Center Market

Saudi Arabia Data Center Market Size:

Saudi Arabia data center market size reached USD 2.1 Billion in 2024. Looking forward, the market is expected to reach USD 7.7 Billion by 2033, exhibiting a growth rate (CAGR) of 15.6% during 2025-2033. The rising amount of digital information, coupled with the escalating need for cloud computing network services, is primarily driving the market growth.

Saudi Arabia Data Center Market Analysis:

• Major Market Drivers: Increasing digital transformation, heightening demand for cutting-edge IT infrastructure, and magnifying cloud adoption are some of the key drivers steering the expansion of Saudi Arabia data center market share. Moreover, Government-backed projects, such as Saudi Vision 2030, encourage the development of large-scale data centers, fostering expansion in the sector. Additionally, expanding e-commerce, fintech, and telecom sectors are fueling the need for robust data storage and management solutions, thereby propelling market growth. With the region's growing demand for cloud-based services, companies are increasingly investing in data center technologies, further driving market growth and enhancing the country’s digital infrastructure.
• Key Market Trends: Key trends observed in the market include the growing adoption of energy-efficient technologies and the increasing shift toward colocation services. As businesses seek cost-effective data management solutions, colocation facilities are becoming a favored option. The Saudi Arabia data center market price is significantly influenced by these trends, along with rising investments in green energy initiatives aimed at reducing operational costs. As the demand for cloud computing and digital services increases, competitive pricing pressures are also shaping the landscape, enhancing affordability for enterprises. 
• Competitive Landscape: Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided. 
• Challenges and Opportunities: The market in Saudi Arabia faces challenges such as high operational costs, regulatory compliance, and energy consumption concerns. However, these challenges create opportunities for innovation in energy-efficient technologies and sustainable infrastructure development. With increasing government support and investment in digital infrastructure, companies can capitalize on opportunities to build scalable, environmentally sustainable data centers. The growing demand for cloud services, edge computing, and enhanced data security presents further growth prospects for both local and international players, despite the challenges of high initial capital expenditure in the data center market in Saudi Arabia.

Saudi Arabia Data Center Market Trends:

Scaling Up Digital Transformation Projects

The Kingdom of Saudi Arabia is actively undertaking Vision 2030, and this is stimulating broad-based digital transformation in the public and private sectors. The Government is making sustained investments in smart cities, e-government services, and digital healthcare, which is driving the demand for data storage and computational infrastructure. Companies are also streamlining operations with the implementation of enterprise software, customer relationship management (CRM) tools, and cloud services, all of which demand strong data center capabilities. Sectors such as oil and gas, transportation, and manufacturing industries are incorporating internet of things (IoT), artificial intelligence (AI), and big data analysis into their operations, further increasing data creation and processing demands. Moreover, projects such as "Smart Medina" and "NEOM" are placing digital smarts into infrastructure, requiring scalable, energy-efficient data centers. A report from the Saudi Ministry of Investment in 2024 projects that digital transformation investments in the Kingdom will hit $13.3 billion by 2025, growing at an annual rate of 17.2%.

Growing Cloud Service Adoption

Cloud computing is fast revolutionizing Saudi Arabia's digital landscape with more and more businesses moving away from conventional information technology (IT) infrastructures to the cloud. This transition is being powered by the increasing demand for flexibility, cost effectiveness, and scalability in handling IT workloads. Businesses in different industries, ranging from banking and education to retail, are adopting Platform as a Service (PaaS), Infrastructure as a Service (IaaS), and Software as a Service (SaaS) product to boost agility. International cloud players are opening local data centers or joining hands with other companies in order to fulfil increasing demands. For instance, in 2024, Google Cloud and the Public Investment Fund (PIF) announced the plans of signing an agreement to build a global AI hub in Saudi Arabia.

Innovation in 5G and Internet of Things (IoT) Interconnection

To witness the accelerated rollout of 5G networks, Saudi Arabia is experiencing a technological revolution, with exponential growth in data consumption and applications based on IoT. Telecom operators are increasing 5G infrastructure nationwide to support real-time communications, low-latency services, and vast IoT connectivity. Manufacturing, utilities, logistics, and transportation industries are adopting smart devices, sensors, and automated systems that need to be processed and analyzed instantly in the form of voluminous data. The continuous stream of data is boosting the use of edge and core data centers to manage workloads in real-time. In addition, smart city initiatives like NEOM and Red Sea Project are combining thousands of IoT devices that all need decentralized computing and storage facility. Data centers are serving as a driving force behind the efficient management and processing of this volume. Therefore, the ongoing deployment of 5G and IoT proliferation are continuously fueling infrastructure investment within the data center ecosystem of the Kingdom. The IMARC Group predicts that the Saudi Arabia 5G infrastructure is projected to reach USD 4,810.7 Million by 2033.

Saudi Arabia Data Center Market Growth Drivers:

Resurgence in Data Localization Regulations

The Saudi Arabian government is working proactively to implement data sovereignty and localization policies to ensure critical data stays in-country. These are some of the regulations that form part of larger cybersecurity and digital sovereignty initiatives that are revolutionizing the way businesses store and handle data. Banks, healthcare providers, and government agencies are being required to store regulated and sensitive data within local jurisdictions. This regulatory push is generating ongoing demand for local data storage centers. Enterprises now either build proprietary data centers or use third-party colocation and cloud services based in the Kingdom. Government-sponsored institutions such as the Saudi Data and AI Authority (SDAIA) are also propelling frameworks and compliance requirements that accelerate the development of secure, scalable local data centers.

Increased Investment by Hyperscalers and Colocation Firms

Large international and regional hyperscale cloud vendors are making continuous investments in Saudi Arabia to capitalize on its fast-expanding digital economy. Players are launching local regions or joint ventures to establish hyperscale data centers. Meanwhile, local colocation players are rapidly expanding their presence in Riyadh, Jeddah, and Dammam. These players are constructing high-capacity, carrier-neutral data centers with sophisticated cooling and power redundancy solutions to serve cloud services and other business customers. Their mission is to serve enterprise customers, government agencies, and cloud service providers who require secure, scalable, and compliant infrastructure. With colocation increasingly being an affordable substitute for proprietary data centers, demand from SMBs and startups is also on the rise. This trend in investment is constantly molding the competitive environment and adding physical and operational capacity to Saudi Arabia's data center sector.

Increased Demand for AI and Big Data Analytics

Saudi Arabian enterprises and government institutions are increasingly adopting artificial intelligence (AI) and big data analytics technologies to increase decision-making power, operational effectiveness, and customer interaction. Programs such as the National Strategy for Data and AI (NSDAI) are motivating organizations to use extensive datasets to gain insights and predictive modeling. Applications in industries like healthcare, retail, and finance create vast amounts of structured as well as unstructured data on a daily basis, which needs extensive processing capacities and storage. For meeting such workloads, data centers are being deployed with high-density computing assets like accelerators. In addition to that, AI programs need low-latency access to information, creating demand for localized infrastructure. The increasing dependence on data-driven technologies is leading to the sustained expansion of AI-facilitated and analytics-capable data centers. With AI spreading across industries, the demand for sophisticated data center architecture is also constantly growing in Saudi Arabia.

Saudi Arabia Data Center Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the regional and country levels for 2025-2033. Our report has categorized the market based on data center size, tier type, and absorption.

Breakup by Data Center Size:

• Large
• Massive
• Medium
• Mega
• Small

The report has provided a detailed breakup and analysis of the market by data center size. This includes large, massive, medium, mega, and small.

Breakup by Tier Type:

• Tier 1 and 2
• Tier 3
• Tier 4

A detailed breakup and analysis of the market based on the tier type have also been provided in the report. This includes tier 1 and 2, tier 3, and tier 4.

Breakup by Absorption:

• Non-Utilized
• Utilized

The report has provided a detailed breakup and analysis of market by absorption. This includes non-utilized and utilized.

Breakup by Region:

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

The report has also provided a comprehensive analysis of the Saudi Arabia data center market by region, including Northern and Central Region, Western Region, Eastern Region, and Southern Region.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided. Some of the key players include:

• Detecon Al Saudia DETASAD Co. Ltd.
• Electronia
• Gulf Data Hub
• Mobily
• NashirNet
• NourNet
• Sahara Net
• Shabakah Integrated Technology
• Systems of Strategic Business Solutions

(Please note that this is only a partial list of the key players, and the complete list is provided in the report.)

Saudi Arabia Data Center Market News:

• April 2025: Dubai-based Khazna Data Centers is looking to make a major leap into neighboring Saudi Arabia, with the aim of taking "at least 25%" of the Kingdom's data center market. Following its latest expansion, Khazna has been "growing tenfold" over the past few years and has now turned its attention to the Saudi market, where $21 billion of data center investment was committed in February alone.
• May 2025: Alfanar Global Development is set to invest $1.4 billion in constructing data centers in Saudi Arabia. Last month, at the LEAP 2025 event, the company announced that it would be building four data centers in the country. The data centers will be "strategically located" in Riyadh and Dammam, and will be focusing on supporting cloud computing and "AI-driven solutions" for public and private sectors
• May 2025: Super Micro Computer, Inc. a comprehensive IT solution presenter for AI, Cloud, Storage, and 5G/Edge, declared that it has signed a strategic partnership under a memorandum of understanding ("MOU") agreement with DataVolt to develop hyperscale AI campuses in the first phase within the Kingdom of Saudi Arabia. This partnership will accelerate delivery of Supermicro's high-density GPU platforms, storage, and rack PnP systems to DataVolt's hyperscale gigawatt-class green renewable and net-zero AI campuses, providing customers with access to unprecended scale and sustainability. Supermicro's advanced liquid cooling solutions minimize power expenses by as much as 40%, speed up time-to-deployment and time-to-online, and enable data centers to operate more efficiently with reduced power usage effectiveness (PUE).
• May 2025: HUMAIN, a Saudi Public Investment Fund subsidiary, signed a strategic alliance with NVIDIA to create AI factories within the Kingdom, starting with an installation of 18,000 NVIDIA GB300 Grace Blackwell chips.
• February 2025: Alfanar Global Development declared a historic $1.4 billion investment to build four of the world's finest data centers. The announcement was made at LEAP 2025 in front of His Excellency Eng. Abdullah Al Swaha, the Minister of Communications and Information Technology.
• February 2025: EDGNEX, DAMAC Group's digital infrastructure division, unveiled plans at LEAP Saudi Arabia 2025 to install 500MW of future data center capacity within Saudi Arabia by the year 2030 with a high emphasis on catering to the Kingdom's cloud computing and AI requirements. The move will further establish the Group's position in driving the Kingdom's digital economy forward.

Saudi Arabia Data Center Market Report Coverage:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia data center market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia data center market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia data center industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.