Khazna’s $5.5B Strategy to Lead Saudi Arabia’s Data Center Boom
Khazna isn’t just expanding into Saudi Arabia, it’s aiming to dominate. Backed by $2.2B in fresh capital, the UAE-based hyperscale operator wants 25% of KSA’s booming data center market.
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They want 25% of the fastest-growing data center market in the Middle East.
And they have the capital, credentials, and confidence to try.
Khazna Data Centers, backed by Mubadala, Silver Lake, and MGX, isn’t just entering Saudi Arabia.
They’re going for the crown.
Saudi Arabia’s data center market is on fire. Valued at $1.3 billion in 2024, it’s projected to reach nearly $4 billion by 2030. That’s a CAGR of 19.6%, among the fastest globally. With AI compute, cloud localization, and sovereign digital transformation at play, this isn’t just a growth story—it’s a generational shift.
And Khazna sees an opening.
The Setup: Gulf Capital Meets Hyperscaler Hunger
Khazna isn’t just another regional developer. They’re the largest data center operator in MENA—with 263 MW in operation and another 175 MW under development.
Backed by Mubadala, integrated into G42’s Microsoft-linked tech stack, and recently re-capitalized via a $2.2B stake sale to Silver Lake and MGX, Khazna is flush with war chest funding.
CEO Hassan Alnaqbi made it clear: they’re not entering Saudi to participate. They’re entering to lead.
“We’re targeting at least 25% of the market,” he told press in April.
Saudi Arabia’s Digital Bet: Vision 2030 Becomes Infra
There are 5 megatrends pushing Saudi’s data center explosion:
Vision 2030 — Saudi’s blueprint to diversify beyond oil has digital infrastructure as a pillar.
Data Localization Laws — Data must reside inside the Kingdom. No build, no business.
Cloud-First Mandate — Civilian government agencies must prioritize cloud deployments.
Hyperscaler Arrivals — Microsoft and AWS are both launching Saudi cloud regions by 2026.
AI Compute Race — 2 GW of new compute capacity is on the table, fueled by AI demand.
For Khazna, this is the Gulf’s hyperscale moment—and they’re positioning themselves as the go-to hyperscaler operator.
The Arena: A Crowded Market Full of Giants
Khazna isn’t the only one with eyes on the prize.
Equinix: $1B+ investment in carrier-neutral data centers
Alfanar: $1.4B to develop 4 new hyperscale facilities
Mobily: $533M for 39MW of capacity
Gulf Data Hub: 320+ MW in the pipeline
Center3, DataVolt, Agility, Edgnex, and PureDC: all scaling fast
But Khazna’s bet? The market will reward maturity, experience, and hyperscale fluency.
In Alnaqbi’s words: “Local firms don’t have the experience to handle hyperscalers… in terms of design, delivery, and operation.”
The Hyperscale Playbook: Why Khazna Believes It Will Win
What gives Khazna its edge?
Track Record: They've delivered multi-MW facilities across the UAE on time and at scale.
Design Expertise: Modular, AI-ready builds with sustainability in mind.
Client Experience: Integrated with G42 and Microsoft’s global cloud infrastructure.
Capital Access: Sovereign + Private Equity = $5.5B enterprise firepower.
They’ve already locked in two sites in Saudi Arabia and are racing to break ground.
The AI Factor: Saudi’s $24B Compute Surge
AI isn’t just a buzzword—it’s fueling the demand spike.
Saudi Minister Abdullah Alswaha revealed plans for 2 GW of new compute buildout, costing between $8M–$30M per MW, depending on chip and cooling complexity.
That’s a $16B–$24B investment wave coming over the next 3–5 years.
Khazna wants to own a quarter of that base layer.
Not the models.
Not the apps.
But the concrete, cooling, and compute the AI economy runs on.
The Risks: Can Khazna Outrun the Obstacles?
Even with its head start, Khazna faces real headwinds:
U.S. Chip Export Restrictions: Could delay or restrict access to high-performance GPUs.
Execution Risk: Delivering 100s of MW in a new country isn’t trivial.
Geopolitical Shifts: Saudi’s regulatory and foreign investment frameworks can evolve fast.
Competition: Global players are hunting the same deals—and local firms are leveling up.
But Khazna has navigated export rules in the UAE before. And their diversified expansion—Türkiye, Kenya, and even Europe—suggests a risk-aware rollout strategy.
The Bigger Picture: MENA as the AI Infrastructure Frontier
Khazna’s Saudi play isn’t a one-off.
They’re building a 100MW AI data center in Ankara, Türkiye, with modular scale-up. They’re eyeing Kenya and potential European sites. They're reportedly exploring U.S. expansion.
In short: Khazna wants to be the “Digital Infra Builder” for emerging markets in the AI era.
Their Saudi strategy is just the opening salvo.
Final Take
Khazna’s 25% market share goal is more than an ambition.
It’s a signal.
That digital infrastructure is now sovereign strategy, not just real estate.
That AI isn’t just a tech shift—it’s an energy, capital, and geopolitics shift.
And that the next wave of digital transformation will be built not in Silicon Valley—but in Riyadh, Abu Dhabi, Ankara, and Nairobi.
Follow the builders.
They’re telling you where the future’s going.
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