Khazna Expands Data Center Operations to Saudi Arabia
Khazna, a prominent data center developer based in the United Arab Emirates, is gearing up for a significant expansion into Saudi Arabia as the two oil-rich nations vie for dominance in the burgeoning artificial intelligence sector.
Speaking from Khazna’s headquarters in Dubai, CEO Hassan Alnaqbi revealed plans to capture at least 25% of the market share in Saudi Arabia, where the company has identified two potential locations for new data centers. Despite facing competition from local specialists, telecommunications firms, and startup developers, Alnaqbi remains confident in Khazna’s ability to cater to hyperscalers with its expertise in design, delivery, and operation.
The Middle East region has become a hotbed for American cloud-computing giants seeking to capitalize on the abundant, cost-effective energy and real estate available. Both the UAE and Saudi Arabia have prioritized AI infrastructure as part of their economic diversification strategies, sparking a race to construct state-of-the-art data centers equipped to handle the demands of AI technologies.
Khazna, established by wealth fund Mubadala, boasts the title of the largest data center operator in the Middle East and North Africa. Following its integration into G42, the Emirati tech conglomerate supported by Microsoft Corp, Khazna has set its sights on expanding beyond the UAE with recent funding from Silver Lake and Abu Dhabi fund MGX.
In a strategic move, investors acquired a 40% stake in Khazna from Emirates Telecommunications Group Co. for $2.2 billion, valuing the company at $5.5 billion. Alnaqbi refrained from disclosing the exact valuation but highlighted Khazna’s steady revenue growth and workforce of approximately 250 employees.
With Saudi Arabia mandating the local storage of personal and financial data, international companies are increasingly establishing data centers in the country to secure lucrative contracts. Amazon.com, Google, and Oracle Corporation are among the tech giants that have committed to expanding their presence in the region to comply with regulatory requirements.
Despite Microsoft scaling back on global data center projects, the Middle East and North Africa are poised to attract $12 billion in new investments by 2027, with Saudi Arabia leading the charge in data center capacity. Saudi Arabia’s Minister of Communications and Information Technology, Abdullah Alswaha, revealed plans to develop two gigawatts of computing capacity, emphasizing the substantial investment required for such operations.
Khazna’s ambitious expansion roadmap includes the construction of a dozen data centers worldwide, with ongoing projects in Turkey, Kenya, and plans for further expansion into Europe. The company currently provides 263 megawatts of computing power, with an additional 175 megawatts in the pipeline.
In alignment with Microsoft’s strategic investment in G42, Khazna committed to divesting from Chinese technology holdings and phasing out Chinese-made equipment, including components from Huawei. As the UAE anticipates potential changes in access to leading American-made AI chips, the future outlook appears promising for the region’s tech ecosystem.
Conclusion
Khazna’s foray into the Saudi Arabian market signifies a pivotal moment in the region’s data center landscape, fueled by the growing demand for AI infrastructure and secure data storage solutions. With a strong foothold in the UAE and strategic partnerships driving its expansion, Khazna is poised to play a key role in shaping the future of data center operations across the Middle East and beyond.
