Oracle Corp plans to invest US$1.5 billion in Saudi Arabia in the coming years as it builds up its cloud footprint in the kingdom and opens its third public cloud region in Riyadh, a company official said.
Increased demand for cloud computing has pushed technology companies such as Oracle, Microsoft Corp, Amazon.com Inc and Alphabet Inc’s Google to set up data centers across the world to speed up data transfer.
Saudi officials have pressed international companies to invest in the kingdom and move their regional headquarters to Riyadh to benefit from government contracts.
Photo: Bloomberg
“We are finalizing the plans for opening the Riyadh region. We are still working with our suppliers before we can announce the actual date,” Oracle senior vice president Nick Redshaw said.
The investment would be made over several years, Redshaw said, adding that Oracle would also expand the capacity of its cloud region in Jeddah, which the company opened in 2020.
The company made the announcement as global tech companies gathered for a major tech conference in the Saudi capital.
Alhough Oracle lags behind its bigger rivals in the race to corner the cloud computing market, it was among the first large tech companies to open a data center in Saudi Arabia.
The kingdom has devoted hundreds of billions of US dollars toward an economic transformation, known as Vision 2030, led by Saudi Crown Prince Mohammed bin Salman.
However, it has struggled to attract foreign direct investment, one of the pillars of Vision 2030, which aims at diversifying the economy away from oil.
Foreign direct investment reached just under US$4.1 billion in the first half of last year, a fraction of the ambitious US$100 billion target set for the end of this decade.
While Oracle has been working with the government, Saudi Arabia has been trying to encourage foreign firms to set up headquarters in the country or risk losing out on government contracts — deals that would be available until the end of this year.
“We are working closely with the Saudi government to finalize plans for that regional headquarters requirement, and we will announce them as we finalize that with them,” Redshaw said.
Oracle has also won contracts from the crown prince’s US$500 billion flagship NEOM project, a futuristic megacity and economic zone that is being built on the Red Sea coast.
NEOM is one of Oracle’s largest consumers of cloud capability in Saudi Arabia, Redshaw said.
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