How (And Why) Saudi Arabia Could Outpace Silicon Valley In The Artificial Intelligence Race

Artificial intelligence (AI) is not just about semiconductors, large language models (LLMs), or headline-making startups. Competing in “the AI race” is dependent on a nation’s ecosystem of expandable energy and competent data center infrastructure—areas where, as it so happens, the Kingdom of Saudi Arabia is uniquely positioned to excel.

Silicon Valley may have decades of freethinking culture and agile investment behind it, based on a bedrock of the world’s largest economy in the US, but the race ahead will be decided by very different strengths. The ongoing research at the organization I lead, the International Data Center Authority (IDCA), shows that Saudi Arabia has a strong electricity grid with ample room for growth in the nation’s cloud and enterprise data centers, as well as its emerging AI data center grid. Saudi Arabia’s data centers currently consume 1.7 percent of its electricity, less than half the rate of the United States.

Our research further shows that nations can reach a consumption rate of five percent before warning signals start to appear. By this benchmark, Saudi Arabia can add almost 1,000 megawatts of new data center capacity without expanding its electricity grid. This places the nation within the world’s top 20 as far as current growth capacity—and in first place in the Middle East. Another success factor is the country’s visionary leadership that can decide with determination, fund its decisions, and move with speed. This is harder to achieve in larger nations with electoral processes, which these days have solely become battlegrounds for political parties and interest groups. But winning a race depends on numerous factors.

However, having the energy alone, plus possessing the vision or the funds to invest in diverse projects, isn’t the only requirement to lead in the intense global AI race. A holistic and robust national platform that is opted to win the AI race will encompass key ingredients such as a winning strategy, effective policy, committed investment, scalable energy, latest chips, robust digital infrastructure, skilled workforce, and trained human capital. In this context, it is important to note two key elements. First, the other nations within the top 20 include dynamic go-getters such as South Korea, Thailand, Brazil, and, of course, India and China. In fact, India has almost 8,000 megawatts of potential, and China has more than 40,000 megawatts, without strengthening its current electricity grids. In parallel, the White House Administration in the United States, which is already the clear leader in AI, is placing further emphasis on the AI race, with it releasing an AI action plan aptly titled “Winning the Race.”

Second, on a per capita (per-person) basis, Saudi Arabia trails all five of its fellow Gulf Cooperation Council (GCC) nations—Bahrain, Qatar, Kuwait, Oman, and the UAE. This data point demonstrates that even though those nations are smaller than Saudi Arabia, they each have the potential to leverage their own wealth into ambitious plans to develop AI data centers and become world leaders. The reality, therefore, is that Saudi Arabia is not alone. Other nations in the Middle East and other world regions are stepping up at an accelerated pace with similar potential. It is up to Saudi Arabia’s leadership to continue to build upon its ongoing economic diversification and transformation initiatives if it is to reach its potential.

To the country’s credit, these efforts have already started with the government’s Saudi Vision 2030 National Investment Strategy, which aims to increase its private sector, increase non-oil exports dramatically, and draw trillions of dollars of investment. However, any vision or plan is effective for as long as it is highly updated with the latest drivers, key performance indicators, and the world’s dynamics. In the modern era, especially in the world of AI, those dynamics change more frequently than desired, and thus plans, strategies, and visions must adapt and evolve with more agility. Building a robust strategy that renders the said subsequent credentials requires a consolidated effort with all eyes on the target.

So, now is the moment to act. The Kingdom has enough sovereign wealth and vision to develop substantial new sustainable energy and thereby create new AI rendering facilities, with growth potential in the process. For instance, every $100 billion investment in sustainable energy would almost double Saudi Arabia’s entire electricity grid, and create at least 2,000 megawatts of newly available electricity for newly built AI data centers, while staying within the five percent benchmark. Thus, with trillion-dollar investment plans being discussed, there are, in essence, no limits to Saudi Arabia’s potential to build the necessary infrastructure for AI advancements. Across the oceans, the reality is that Silicon Valley itself is already well past the five-percent benchmark. There are deep concerns about its potential to expand its data centers and develop modern AI data centers. Most new plans and activities in the US are focusing on new greenfield areas in the Midwest, Southeast, and Mountain West, rather than in Silicon Valley.

Conclusively speaking, Saudi Arabia, if planned well and executed with precision and agility, could outpace Silicon Valley in building new AI data centers and establishing global leadership. But the more important matter is that it will be competing with its own GCC neighbors, as well as other ambitious states across the globe. To build its edge, the Kingdom must leverage its resources, stay committed to the ambitious plans found in its Vision 2030, and continue to dream, plan, and execute well beyond that date.

About The Author

Mehdi Paryavi is the Chairman and CEO of the International Data Center Authority (IDCA), the world’s leading digital economy think tank and prime consortium of policymakers, investors, and developers in artificial intelligence, data centers, and cloud.