RIYADH: Saudi Arabia leads the Middle East in attracting investment in artificial intelligence data centers thanks to its rich energy resources, economic size and long-term diversification strategy, according to Mehdi Paryavi, founder and CEO of the International Data Center Authority.
In an interview with Asharq Al-Awsat, Paryavi said Saudi Arabia is expected to attract the largest share of investment in regional data centers, followed by the UAE.
He described data centers as the backbone of the digital economy, calling them “modern-day refineries” as they process data, humanity’s most precious resource.
Saudi Arabia, home to the world’s largest oil production facilities, is therefore well-positioned to lead the next generation of AI data centres, he said.
His remarks came on the heels of the July 15 release of IDCA’s 2026 World Energy Report, which identified the Middle East as one of the world’s biggest growth opportunities for AI data centers. Data centers account for about 2% of the world’s electricity consumption, but only 0.5% of the Middle East’s electricity consumption, leaving plenty of room for expansion.
Paryavi said Saudi Arabia and the UAE currently dominate the regional market, with data centers consuming about 440 megawatts and 340 megawatts of electricity, respectively. Together, these account for nearly 80% of the total electricity consumption of data centers in the Middle East, which is approximately 1 gigawatt.
But competition is heating up, as Oman, Kuwait and Qatar pursue ambitious projects, and Syria and Iraq undergo major changes.
He also highlighted Egypt’s National AI Strategy, which aims for artificial intelligence to contribute 7.7% to gross domestic product by 2030, Jordan’s Digital Transformation Plan, and Iraq’s efforts to attract data center developers and investors.
Saudi Arabia emerges as regional AI data center hub
Back in Saudi Arabia, Paryavi said the country’s advantages include the region’s largest economy, political stability, strategic location, a larger population than other Gulf Cooperation Council countries, a large sovereign wealth fund and a clear commitment to economic diversification.
Saudi Arabia, the region’s only G20 member, is ranked 44th on IDCA’s 2026 Global Digital Readiness Index and plans to develop AI data centers with a total capacity of 6GW by 2034.
He drew a distinction between traditional small and medium-sized data centers, which are expanding across the Gulf, and ultra-large facilities, where Saudi Arabia has emerged as a leading candidate in the region.
He cited the Public Investment Fund’s Humane Initiative and operators such as Center3, Mobily and DataVolt as key drivers of the country’s ambitions.
He also highlighted the Oman Digital Triangle project in Oman and the Khazna Data Center in the UAE, whose entire portfolio was recently certified by IDCA.
Energy will be the deciding factor in the global AI race
Paryavi said the Middle East’s combination of abundant and scalable energy, strategic geographic location, financial strength and agile decision-making gives it a competitive edge while energy shortages and grid constraints have slowed the uptake of AI in established markets such as the US, Singapore, Germany and South Korea.
The biggest constraint to AI growth is not chips or capital, but energy, followed by labor availability and public policy, he added. All AI models ultimately run in data centers, which require reliable power.
He stressed that the Middle East remains one of the few regions capable of supporting the next generation of AI infrastructure, as power shortages increasingly constrain the expansion of AI in both developed and developing countries.
IDCA’s 2026 Global Energy Report states that AI is driving significant changes in the data center industry. We predict that the power consumption of AI-powered data centers will increase by 50% by 2025, putting unprecedented pressure on power grids around the world and making energy access a decisive factor in determining the future flow of AI investments.
