Saudi Arabia is signaling its massive ambitions for artificial intelligence (AI), making it a cornerstone of its Vision 2030 plan to diversify the economy. The scale of investment is immense.
At Riyadh’s Future Investment Initiative conference, a 3 billion partnership was announced between Blackstone and the kingdom’s Humain to build a network of data centers.
Humain’s CEO, Tareq Amin, expects other major firms like BlackRock and KKR may join the push.
Amin wants Saudi Arabia to become one of the world’s top three AI infrastructure providers. The company plans to build 1.9 gigawatts of data center capacity by 2030.
To power its digital infrastructure, energy giant Aramco completed an 11 billion lease deal for its Jafurah gas facilities during the same conference.
The flurry of activity takes place as global excitement over AI reaches a fever pitch.
JP Morgan Chase CEO Jamie Dimon called AI "as powerful as the steam engine" in an interview, a message that resonates in Riyadh.
On the same day as the Blackstone deal, chipmaker Nvidia became the first company to close with a valuation over 5 trillion.
The Thirst for Data
The main issue: AI runs on data centres, and data centers consume enormous amounts of water to cool their powerful microchips.
In a region already experiencing extreme heat and water scarcity, locating these centres is a serious difficulty.
The consumption quantities are immense. Research from Mordor Intelligence estimates that water consumption at data centers in the Middle East and Africa is projected to increase fourfold to over 426 billion liters by 2030.
Current Saudi data centres already use between 2.3 and 2.8 liters of water for every kilowatt-hour of energy.
At full load, the 300-megawatt infrastructure currently operating would use 6.7 million cubic meters of water annually, an amount used by 160,000 Saudi households.
Should the kingdom increase its capacity to 1,300 megawatts as foreseen, the water demand would increase to require an amount sufficient for 700,000 households. All of this happens where the World Resources Institute ranks Saudi Arabia, the UAE, and Qatar among the world's most vulnerable regions.
The region receives extremely low rainfall, and intense heat results in high evaporation rates.
The Energy-Water Paradox
At first glance, the kingdom’s abundant energy endowment seems like a large advantage. Groq CEO Jonathan Ross told CNBC that the economics of moving data are highly favourable, making Saudi Arabia an attractive hub.
The advantage diminishes when water enters the calculation. In the Gulf, a large majority of all water originates from desalination, an energy-intensive process that itself operates primarily on natural gas.
Thus, the energy powering the data centres must simultaneously be used to produce the water required for cooling.
Anita Nouri of Green Growth Planning Consultancy warned that using traditional cooling systems places added demand on scarce freshwater resources.
Engineers are seeking improvements. Research points toward water-efficient energy sources such as solar and wind. Some operators, like the Khazna Data Centre in the UAE, are piloting alternate cooling sources, including treated sewage effluent.
These methods, however, have not been proven at the immense scale Saudi Arabia is planning.
The People Problem
Capital and structures alone cannot create a tech center. A 2025 report noted a 20 percent shortfall in qualified local talent for open tech positions.
The shortage is more severe within artificial intelligence, where there exists a 50 percent hiring gap for specialized roles.
Riyadh is attempting to compensate. AI-related job postings in the kingdom increased by nearly 54 percent annually between 2018 and 2022.
The government established the Saudi Data and Artificial Intelligence Authority in 2019, intending to train 20,000 specialists by 2030.
Furthermore, 86 percent of the country’s universities now offer AI-focused undergraduate degrees.
These quantities are still small compared to the need. Attracting foreign professionals proves difficult; they require high salaries and often show reluctance to stay for long durations.
The Race to the Future
Saudi Arabia is in a global race. Foreign direct investment in the kingdom grew 24 percent last year, even as neighbouring nations pursue similar strategies.
Abu Dhabi, for example, launched Stargate Campus with a 500 billion AI investment vehicle supported by OpenAI, SoftBank, and Oracle.
The viability of Saudi Arabia’s strategy will be tested soon. Humain has already started construction on its first data centres, with plans for them to be operational early next year.
The great difficulty will arrive during the summer months, temperatures exceed 50 degrees Celsius (122 degrees Fahrenheit).
The kingdom is making a large financial commitment assuming engineering can overcome environmental restrictions.
The difference between the time needed to build structures (months) and the time needed to train a specialist (years) will determine whether Saudi Arabia’s AI aspirations succeed or result in unused capacity.
Keep up with Daily Euro Times for more updates!
Read also:
ChatGPT: Europe Puts Regulations on the AI Provider
New Browser Race: Ladybird Hits Apple Goal as AI Agents Explode
K2 to the Rescue: AI Model Outsmarts France’s Mistral
