Oracle is opening new data centres in the UAE and Saudi Arabia to keep up with rising adoption of artificial intelligence, a senior executive has told The National.
The technology company, which has cloud regions in Dubai and Abu Dhabi in the UAE, and Jeddah and Riyadh in Saudi Arabia, had already announced plans to open one in the kingdom’s Neom megaproject.
“I can tell you that we're growing the number of data centres we have in the UAE and Saudi,” said Cormac Watters, executive vice president of applications for Oracle Europe, Middle East, and Africa.
“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.”
Oracle
“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,” Mr Watters told The National at Oracle AI World in Las Vegas.
Gulf states, including Saudi Arabia and the UAE – the Arab world's two biggest economies – faced Iranian attacks on civilian infrastructure during the regional war, which began on February 28. The Gulf states are now recovering, although Saudi Arabia continues to face attacks by Yemen's Houthi rebels.
Amid the strikes, a key focus for companies in the region has become the issue of sovereignty, said Mr Watters.
'Big kill switch'
“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 said.
“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 key question is where the data is stored and “who has the big kill switch, or who doesn't have the big kill switch?”, he said.
Sovereign AI basically refers to the domestic production and deployment of AI, including the use of local infrastructure, data, models and talent.
But now, with increased geopolitical tensions, there is also another new topic entering the conversation, Mr Watters said. “Because of the physical threat of a data centre being hit … they're talking about digital embassy,” he said.
What that means is, if a provider offers a sovereign cloud physically in one city, there is now an option to lift that and transport it physically elsewhere, to another country, while maintaining its sovereignty – similar to a country’s embassy.
“So, if you're just a local data centre provider giving a sovereign solution, if there's a genuine physical threat, it's a challenge … To be truly sovereign, you need be local, but also have access to alternatives in the event of there being a disaster,” he said.
While such an option is doable at present, especially for companies with a global footprint such as Oracle, regulatory considerations for some entities, such as banks, will need to be considered and approved.
“It’s very complex. Digital emphasis and sovereignty is becoming the future,” Mr Watters said.
Fast adopters
The Middle East is currently Oracle's fastest-growing part of its wider Europe, Middle East, and Africa region.
Outside of growth in the UAE and Saudi Arabia, the company is also seeing opportunities in Qatar and Kuwait, Mr Watters said.
“We have all the different types of data centres, and we've got different types of go-to-market [strategies]. So we will go direct, or we go with partners,” he said.
Syria is also now becoming an “interesting” market in the Middle East as it opens up its economy. “But we may choose to look at that market through a distributor partnership with one of our big partners,” Mr Watters said.
Overall, he remains bullish about the UAE and the region emerging as the leaders worldwide when it comes to AI. The UAE, Saudi Arabia and Qatar last year announced AI investment plans exceeding 5 per cent of GDP, amounting to about $120 billion, according to the International Monetary Fund.
“I think the Middle East and UAE organisations are probably faster at adopting it [AI] than anyone else,” Mr Watters said.
“That's my view because they have a different mindset. They don't have the legacy of 50-year-old systems that [they are hesitant to change]. They are used to change,” he said. “They see innovation all around them every day, every month, every year … that's not the same pace everywhere else.”
