Oracle's second cloud region in Saudi Arabia to help kingdom harness AI's full potential

Move is part of a $1.5bn investment commitment in the Arab world's biggest economy

Oracle's five live cloud regions in the Middle East and Africa are in Abu Dhabi, Dubai, Jeddah, Johannesburg and Riyadh. Chris Whiteoak / The National

Oracle has opened its second cloud region in Saudi Arabia, giving a boost to Riyadh's digital transformation strategy, as it aims to help the kingdom's economy harness the full potential of artificial intelligence.

The move, part of a $1.5 billion investment commitment announced by the US technology company in the Arab world's biggest economy, will help public and private organisations migrate to the cloud, Texas-based Oracle told The National on Tuesday.

The new project joins the operational cloud region in Jeddah, with two more planned – one in Riyadh and the other at Neom, the $500 billion high-tech megacity along the Red Sea.

Oracle previously said the Neom region would be open “soon”.

Oracle’s new cloud region reflects the kingdom’s “continuous efforts in boosting the digital economy based on modern technologies and innovation”, said Haytham Alohali, Vice Minister in the Ministry of Communications and Information Technology.

It will also promote data sovereignty, which refers to the protection of data within the laws and regulations of the jurisdiction it is in, a key factor to its security and reliability.

“This step will significantly enable international and local companies to achieve innovation and promote the adoption of AI and cloud computing technologies in various sectors, which enhances Saudi Arabia's competitiveness at the regional and international level,” Mr Alohali said.

The adoption of cloud services has continued to grow in the Middle East amid the rise of technology-savvy young consumers and an evolving digital landscape, underpinned by government efforts to develop the future economy.

This has given global cloud providers an incentive to tap into the potential being offered by the region. Global companies including Microsoft, Amazon, IBM and Alibaba Cloud have also all opened cloud and data centres in the region.

And with the emergence of generative AI, an expanded cloud footprint in Saudi Arabia would be vital for companies as they move forward with digital transformation, said Jyoti Lalchandani, regional managing director at the International Data Corporation.

“Local cloud infrastructure helps organisations ensure faster data processing, enhanced security and their compliance with national regulations, helping them innovate more efficiently and effectively,” he said.

“This strategic move not only supports the kingdom’s vision to leverage artificial intelligence to drive digital transformation, but also empowers companies to harness the full potential of AI, driving competitive advantage and creating local value and growth.”

The number of Oracle's cloud regions in the Middle East and Africa stands at eight, including two more planned for Morocco, according to a May statement.

Counting Riyadh, it now has five live cloud regions in the Middle East and Africa region, including one in Abu Dhabi, Dubai, Jeddah and Johannesburg.

While Oracle does not provide market share figures, it currently manages 75 cloud regions across 26 countries, according to its website.

The biggest player in the global cloud infrastructure services sector is Amazon Web Services, with a 31 per cent market share, followed by Microsoft Azure with 25 per cent and Google Cloud with 10 per cent, data from Statista shows.

Global spending on public cloud services is projected to surpass $1.6 trillion by 2028, double the estimate of $805 billion for 2024, the International Data Corporation said in a report last week.

In the GCC, revenue in the public cloud market is expected to hit more than $5 billion this year, according to Statista.

Oracle's Riyadh cloud region “will help accelerate adoption of cloud and AI technologies to boost innovation across all sectors of the Saudi economy, while helping organisations addressing local data hosting requirements”, said Richard Smith, executive vice president and general manager, for Oracle's cloud infrastructure in Europe, the Middle East and Africa.