AWS to invest $5.3 to build data centers in Saudi Arabia to bolster tech in the region

Amazon Web Services (AWS) is the latest high-tech giant to announce a major stake in Saudi Arabia’s burgeoning technology industry, unveiling a plan this week to invest more than $5.3 billion in the Middle East kingdom to build data centers and a significant cloud presence in the region.

Specifically, AWS will launch what it’s calling an AWS infrastructure Region in Saudi Arabia in 2026 to give technology developers, existing businesses, and startups and entrepreneurs a comprehensive, in-country data-center infrastructure for running their cloud-based technology solutions, according to a release by Amazon’s cloud unit.

“The new AWS Region will enable organizations to unlock the full potential of the cloud and build with AWS technologies like compute, storage, databases, analytics, and artificial intelligence, transforming the way businesses and institutions serve their customers,” said Prasad Kalyanaraman, vice president of infrastructure services at AWS, in a press statement.

Seeding the Kingdom

AWS will join competitors Huawei, Microsoft, and Oracle in launching significantly funded plans to build cloud infrastructure in Saudi Arabia, bolstering the country’s plans to become a technology hub for the Middle East. Indeed, the kingdom is positioning itself as a global leader in digital technologies ahead of its hosting of the World Expo 2030 in Riyadh.

Amazon’s investment in the kingdom aims to fortify this strategy “with the highest levels of security and resilience available on AWS cloud infrastructure, helping serve fast-growing demand for cloud services across the Middle East,” Kalyanaraman said.

The move likely was spurred not only by an interest in ensuring it stays on pace with competitors in a fast-growing global market, but also by pressure on foreign firms applied last year by Saudi Arabia to move operations to the country or risk losing government contracts. Amazon — alongside its US-based cloud competitors Google and Microsoft — acted quickly to set up regional headquarters in Saudi Arabia.

Microsoft already has said it would invest $2.1 billion in a global super-scaler cloud in Saudi Arabia, while Oracle will invest $1.5 billion to launch new cloud areas. Chinese competitor Huawei also has invested $400 million in cloud infrastructure for its services in Saudi Arabia.

Middle East gets cloudy

All of this investment is buoying cloud strategies across not just Saudi Arabia but the entire region, noted Phil Dawson, vice president of research for cloud infrastructure at Gartner.

“If I go back three years, there was limited cloud adoption in Arab states,” he said. “Now things are improving immensely … and I’m seeing more mature modernization projects [in part] because of that local investment by cloud providers.”

While technology companies are each taking their own approach to how to get a foothold in the region, it behooves dedicated cloud infrastructure providers like Microsoft and Amazon to build data centers and have in-country infrastructure due to the culture of technology in the region, Dawson said.

“Sovereignty, ownership, and governance are big issues for local markets like Saudi, which want things in country and want things accessible,” he said. To build infrastructure in country, then, makes it easier for them to do business in the Arab states, Dawson said.

“The more the cloud vendor invests in the Gulf country, the more they can partner and sell services in that country,” he said.

Technology and training

The new AWS Region in Saudi Arabia will comprise three Availability Zones at launch, with plans to establish more zones in the future. Each zone has its own has independent power, cooling, and physical security, and is strategically placed to put infrastructure in separate and distinct geographic locations.

As part of its cloud investment, AWS also will offer new training programs, one of which aims to bolster the kingdom’s goal to increase the participation of women in the workforce. To support this, AWS will launch a new upskilling program, “AWS Saudi Arabia Women’s Skills Initiative,” in partnership with Skillsoft Global Knowledge to provide free training for up to 4,000 women to help kickstart their career in cloud computing.

AWS also will provide additional cloud-computing training for Saudi Arabian students, developers, and technical and nontechnical professionals of all genders through various offerings. It will also establish two new innovation centers and provide startups in the Middle East and North Africa with technical mentorship and trainings on AWS technologies.