Several US artificial intelligence and cloud firms are increasing investments and operations in the Gulf region even as geopolitical tensions raise the cost and risk of building digital infrastructure.
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Oracle plans to construct additional data centers in Saudi Arabia and the United Arab Emirates to meet rising demand, according to reporting in The National.
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Scale AI — 49% owned by Meta and a provider of labeled data for model training — has opened an office at the Dubai International Financial Center. The company also struck an agreement to work with a unit of G42 to develop AI agents.
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New York-listed Snowflake said it expects to invest $300 million in Saudi Arabia through 2030. Snowflake’s clients in the kingdom include dairy company Almarai and Red Sea Global, a developer backed by the Public Investment Fund. Led by former Google Ads chief Sridhar Ramaswamy, Snowflake plans two additional cloud computing regions and, together with the communications ministry, AI training for thousands of Saudis.
Analyst view and risks
Bloomberg economist Ziad Daoud has said that so far data center construction has “barely moved the needle” for Gulf economies. He noted that the war involving Iran makes building that infrastructure more expensive and risky; hardened security measures add about 5% to 7% to costs. Despite those added premiums, the reporting indicates there is willingness among some companies to absorb the higher expense in order to serve local demand and expand their regional footprint.
Why it matters
These moves suggest that major US tech and AI firms still see strategic value in Gulf markets despite elevated geopolitical risk. Expanding local data centers, offices and training programs could increase regional cloud capacity and AI skills in the short term, and influence the development of the Gulf’s digital infrastructure over the longer term.
(This article is based on reporting referencing Oracle, Scale AI, Snowflake, Almarai, Red Sea Global, G42, Sridhar Ramaswamy and Ziad Daoud, as cited in The National and Bloomberg.)
