Dubai-based Khazna Data Centers is eyeing a significant expansion into neighbouring Saudi Arabia, aiming to capture “at least 25%” of the Kingdom’s data centre market.
CEO Hassan Alnaqbi told Bloomberg that Khazna has already identified two sites for potential new data centres.
Earlier this year, Emirates Telecommunications Group Co. sold its 40% stake in Khazna, worth $2.2 billion, to Silver Lake and the Emirati state-owned investment firm MGX
Following the investment, the firm is looking to expand, with Khazna growing its presence in the UAE through two new facilities earlier this month.
In the wake of its recent expansion, Alnaqbi told Bloomberg Khazna has been “growing tenfold” in recent years and has now set its sights on the Saudi market, where $21 billion in data centre investments was pledged in February alone.
The investment comes as the Kingdom mandated that data be stored within national borders, which would force international brands looking to enter the market to establish a digital presence there.
Saudi Arabia is becoming an increasingly lucrative option for data centre developers, with the likes of Equinix, DataVolt, and Alfanar among those looking to expand into the market.
Meanwhile, hyperscale giants like AWS and Microsoft are looking to launch dedicated cloud regions in the kingdom, both of which are set to launch by 2026.
Of the local rivals eyeing the burgeoning Saudi Market, Alnaqbi told Bloomberg: “None of them have the experience to handle the hyperscalers, in terms of design, delivery and operation.”
One potential challenge for data centre operators like Khazna entering the Saudi market is the US chip export restrictions. The rules limit the sale of high-power hardware to certain countries to prevent chips from being sold to sanctioned nations such as China, North Korea, and Russia.
Khazna, however, already has experience in handling the rules, as it’s home of the UAE, is also on the list of nations subject to hardware restrictions.
Bloomberg reports, however, that an official from G42, the Microsoft-backed Emirati tech conglomerate of which Khazna is a member, expressed confidence about the rule impacting the UAE being altered.
