Oracle Expands Data Centre Footprint in UAE and Saudi Arabia Amidst Soaring AI Demand

Oracle is significantly increasing its data centre capacity in the United Arab Emirates (UAE) and Saudi Arabia to accommodate the rapid growth in artificial intelligence (AI) adoption, according to a senior executive. The technology giant, which already operates cloud regions in Dubai and Abu Dhabi within the UAE, and in Jeddah and Riyadh in Saudi Arabia, had previously announced plans for a data centre at Saudi Arabia's Neom megaproject.

Cormac Watters, executive vice president of applications for Oracle Europe, Middle East, and Africa, confirmed the expansion, stating, "I can tell you that we're growing the number of data centres we have in the UAE and Saudi." He cited security concerns as the reason for not disclosing exact locations: "We're reluctant to explain where they all are because of the [geopolitical] situation … We don't want any bad actors to somehow figure it out." This statement follows an incident in March where Iran targeted Amazon data centres in the UAE and Bahrain, which Amazon has reportedly struggled to repair.

Mr. Watters elaborated on the expansion, noting, "We would have added a couple of new ones over the last six months, and there'll be more coming in the next six months. The demand is huge, so that's what's driving it." He made these remarks to The National at Oracle AI World in Las Vegas. The Gulf states, including Saudi Arabia and the UAE, which are the Arab world's two largest economies, have experienced attacks on civilian infrastructure and energy installations during recent regional conflicts. While recovery is ongoing, Saudi Arabia continues to face challenges from attacks by Yemen's Houthi rebels.

Amidst this geopolitical climate, data sovereignty has become a paramount concern for regional businesses, as highlighted by Mr. Watters. He explained, "From the business side … customers are deciding that if it's just a normal routine purchase, they're waiting, if it's a strategic transformation, they're wanting to keep going." He added, "We're managing to work closely with them to overcome the hurdle, but it brings the first topic of conversation every single time to being sovereignty." A critical aspect of this is understanding data storage locations and control: "A key question is where the data is stored and 'who has the big kill switch, or who doesn't have the big kill switch?'"

Sovereign AI, defined as the domestic production and deployment of AI using local infrastructure, data, models, and talent, is gaining prominence. However, increased geopolitical tensions have introduced new considerations, such as the concept of a "digital embassy." Mr. Watters described this as the ability to relocate a sovereign cloud solution, like one physically based in Abu Dhabi, to another country while maintaining its sovereign status, akin to a national embassy. "To be truly sovereign, you need be local, but also have access to alternatives in the event of there being a disaster," he explained. While global companies like Oracle can offer such flexibility, regulatory approvals, particularly for entities like banks, will be complex. "It’s very complex. Digital emphasis and sovereignty is becoming the future," Mr. Watters concluded.

The Middle East is currently Oracle's fastest-growing market within its Europe, Middle East, and Africa region. Beyond the UAE and Saudi Arabia, Oracle sees potential in Qatar and Kuwait. The company employs diverse strategies, including direct sales and partnerships, and is exploring opportunities in Syria as its economy opens up, potentially through distributor partnerships. Mr. Watters expressed optimism about the UAE and the broader region becoming global AI leaders. He noted that organizations in the Middle East, particularly the UAE, are adopting AI faster than elsewhere due to a forward-thinking mindset and a lack of legacy systems, enabling them to embrace innovation readily.