Saudi Arabia has emerged as one of the fastest-growing data center markets in the world, ranking third globally in annual operating IT capacity growth, according to a new research by Savills.
Between 2024 and 2026, Saudi Arabia’s active computing power at data centers rose about 23% annually, matching Finland but behind Malaysia at 50%, and Indonesia at 27%.
These countries are part of a new wave of high-growth markets for data centers, with Malaysia standing out for its substantial build-out from a very low 2020 base.
Data center capacity in Malaysia is expected to reach about 2 gigawatts (GW) by the end of the year, with the city of Johor Bahru, in particular, leading the charge. Located just across the causeway from land- and power-constrained Singapore, Johor Bahru has been a particular beneficiary of the data center development push, with 850 megawatts (MW) completed, 1.8 GW under construction and an additional 2.7 GW in the pipeline, according to domestic financial news organization Edge Malaysia. The city now stands among the top three markets in Asia-Pacific (APAC) in operational capacity alongside Tokyo in Japan and Beijing in China.
Besides Malaysia, Indonesia and Saudi Arabia are also scaling rapidly from small bases. While still modest in absolute size, at about 1.4 GW for Indonesia, and 467 MW for Saudi Arabia, these countries have recorded some of the steepest growth trajectories.
Saudi Arabia’s data center market
In Saudi Arabia, operational data capacity has surged over the past years, rising nearly sixfold from just 68 MW in 2021 to 440 MW in 2025, according to the Saudi Press Agency. The sector expanded further in Q1 2026, with capacity rising over 6% in the first four months of the year across more than 60 data centers.
This progress is backed by investments in data centers and digital infrastructure that now exceed SAR 56.2 billion (US$14.87 billion), and which align with the country’s national data and AI strategy intended to diversify the economy and enhance readiness for the knowledge economy.
Notable initiatives include the US$100 billion Transcendence project backed by the Public Investment Fund (PIF), alongside the strategic partnership between HUMAIN, a national artificial intelligence (AI) company owned by PIF, and Blackstone-backed data center platform AirTrunk.
The Transcendence initiative seeks to build an extensive AI ecosystem in the country spanning innovation, infrastructure and talent development. It aims to nurture startups and create a general environment for AI experimentation, and emphasizes workforce training, AI literacy, and supportive regulations to attract and retain top talent.
As part of the initiative, PIF is partnering with major technology firms, working, for example, with Google to establish an advanced AI hub in Saudi Arabia that is anticipated to contribute as much as US$71 billion to the country’s economy.
Through Transcendence, Saudi Arabia wants to rival existing top AI hubs, ranking among the top 15 in the world for AI by the end of the decade, by which time it wants to be an exporter of AI solutions.
Meanwhile, the HUMAIN and AirTrunk partnership, announced in October 2025, includes an SAR 11 billion (US$3 billion) investment for a data center campus in Saudi Arabia. The parties are collaborating across several key areas, including data center design, construction, and operation; financing through equity and debt; and go-to-market initiatives to attract hyperscalers and enterprise clients. The partnership also focuses on developing local talent and capabilities.
US, China lead in data center capacity
With around 50 GW of live IT power, the US is the dominant global market by data center capacity, followed by China with about 40 GW. Japan, the UK, Germany, Ireland and the Netherlands are also large, mature markets with live IT power of 2.3 GW, 2 GW, 2.7 GW, 1.5 GW, and 1.1 GW, respectively.
In 2025, global demand for compute power stood at 82 GW, according to McKinsey, but as artificial intelligence (AI) continues to boom, capacity needs are poised to more than triple to 219 GW by 2030.
The consultancy estimates that between 2025 and 2030, non-AI demand could rise 1.7 times from about 38 GW to 64 GW, while AI-related demand is projected to grow 3.5 times from about 44 GW to 155 GW, representing roughly 70% of total data center demand.
Across the Middle East, data center capacities are expanding rapidly to meet this demand, reaching about 1 GW in 2025 through a number of efforts and initiatives, according to PwC.
The UAE has made significant strides in its data centre ecosystem with Khazna Data Centres unveiling in October 2024 a 100 MW AI facility in Ajman and plans to deploy significantly more capacity in the long term.
In Qatar, investments in digital infrastructure, including the US$3 billion deal involving alternative asset manager Blue Owl Capital, along with strict data security regulations, have attracted global players like Microsoft and Google to establish data centers within the country.
In Kuwait, Google has committed to launching three new data centers, while in Bahrain, a partnership between Batelco by Beyon and Qareeb Data Centers seeks to introduce the first edge data center in the country.
Featured image: Edited by Fintech News UAE, based on image by DC Studio via Magnific
