The Wall Street Journal reported last month that Saudi Aramco and Google parent, Alphabet, two of the world’s biggest companies, are in talks about jointly building a large technology hub inside the kingdom, Citing sources familiar with the talks, WSJ said Alphabet would help Aramco build data centers around Saudi Arabia but said it wasn’t clear whose data the centers would house or who would control them. It was also unclear when or whether such a deal would be finalized, stated the WSJ report.
The size of the potential joint venture is unclear, although it could be big enough to become listed on Saudi Arabia’s stock exchange, it added. An alliance would help bolster the development of the technology sector in Saudi Arabia, a goal Crown Prince Mohammed bin Salman has pointed to as a key part of Saudi Vision 2030 to diversity the Saudi economy and wean the kingdom off its reliance on oil. Alphabet’s Google is chasing both Amazon.com Inc. and Microsoft Corp. in the business of renting computing power and storage online, and a joint venture with Aramco would give it a key foothold in Saudi Arabia as it rushes to develop its tech sector, said the report. None of the three companies have massive data-center complexes, known as “regions” in industry parlance, in the area, although Amazon has plans to open one in Bahrain and Microsoft has announced it will open two data-center operations in South Africa this year. Amazon is also close to finalizing a $1 billion deal to build three data centers in Saudi Arabia, people familiar with that deal said. The deal is expected to be announced during a trip to the United States by the Crown Prince early this year. A data-center region in Saudi Arabia could potentially help Google win business from oil-industry customers that are looking to shift their computing operations to the cloud. The costs for such centers can run into the hundreds of millions of dollars, stated the WSJ report. Most data for the Middle East is piped from Europe, slowing surfing to the most-trafficked websites, which are accessed via long-distance undersea cables. Local data servers which would store content but also cached memory of personal-navigation data or social-media content would speed up access and help the country be more competitive in the digital economy.