Energy Surplus Positions Saudi Arabia as a Potential Global Hub for AI Data Centers

Saudi Arabia’s plentiful energy reserves could turn the kingdom into a preferred location for large-scale artificial intelligence data centers, according to Groq Chief Executive Officer Jonathan Ross. Speaking at the Future Investment Initiative conference in Riyadh, Ross outlined why the country’s energy profile gives it a competitive edge in the fast-expanding market for AI infrastructure.

Ross, who leads the California-based AI chip producer, said the kingdom’s excess electricity supply can be converted into computing power and then exported as processed data. Transporting electricity over long distances is costly, he noted, whereas digital information moves globally at a fraction of the expense. This cost differential, he argued, supports building vast computing facilities in areas with underutilized energy and shipping the results elsewhere.

Why the Middle East Fits AI Infrastructure Needs

The CEO emphasized that data centers benefit from remote, low-cost environments rather than heavily populated urban areas where land, energy and cooling are expensive. Saudi Arabia, with ample available land and significant untapped energy capacity, matches those criteria. Ross added that operational expenses for running AI chips in the kingdom are currently lower than in certain Nordic countries, regions traditionally viewed as attractive because of their abundant renewable power and cool climates.

Saudi Arabia’s ambition to diversify its economy under the Vision 2030 strategy further supports large-scale digital projects. The plan seeks to expand non-oil industries, including technology, and has already prompted global firms to announce infrastructure partnerships in the Gulf state. Ross’ comments suggest that AI computing could become one of the flagship sectors benefiting from the initiative.

Exporting Data Instead of Power

During his appearance on CNBC’s “Squawk Box Europe,” Ross framed data as a virtual commodity that can capture the value of Saudi Arabia’s energy surplus. Electric power is physically tied to transmission networks and suffers losses and high costs over distance. By contrast, synthetic intelligence tasks—such as training large language models or performing complex analytics—require substantial power on site but generate results that can be shared worldwide almost instantaneously.

Ross argued that concentrating compute clusters where energy is least expensive can lower the overall price of AI services. Once calculations are complete, only the finished data sets, model parameters or inference outputs need to travel. Moving those packets across global fiber networks is orders of magnitude cheaper than relocating raw electricity.

Cost Comparison With Established Regions

Nordic countries have long promoted their cooler climates and renewable energy mix as cost-effective options for data centers. Ross acknowledged the appeal of those locations but contended that Saudi Arabia’s current cost structure is even more favorable. Although he did not disclose specific figures, he stated that operating Groq’s specialized AI chips in the kingdom reduces expenses relative to several Nordic sites.

Lower costs could attract cloud providers, hyperscalers and enterprise clients seeking to trim AI training and inference budgets. Ross’ remarks indicate that Groq sees the Middle East as a natural growth area for its processors, which are designed to accelerate large-scale AI workloads.

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Alignment With Vision 2030 Objectives

Saudi authorities have repeatedly signaled a desire to develop domestic technology capabilities. Vision 2030 promotes investment in digital infrastructure, renewable energy and advanced manufacturing. Building AI data centers aligns with each of those goals, potentially creating high-skill jobs and establishing new export revenues not tied to hydrocarbons.

An abundant power supply is a prerequisite. Saudi Arabia’s electricity generation relies heavily on oil and natural gas, but the kingdom is expanding solar and wind capacity. According to the International Energy Agency, the country plans to increase renewable output significantly this decade, a shift that could provide low-carbon energy for future data facilities.

Next Steps for the Data Center Market

While Ross positioned the kingdom as “the ideal place” for AI compute, large-scale projects would still need substantial capital, network infrastructure and regulatory support. Several global technology companies have already announced regional investments, and additional agreements could follow if cost advantages remain compelling.

Groq, founded in 2016, designs processors optimized for machine learning inference and training workloads. By highlighting Saudi Arabia’s cost profile, the company underscores how energy economics are shaping the geographical distribution of AI computing power worldwide.

Crédito da imagem: Groq