Oracle adds data centers in UAE and Saudi Arabia as Gulf costs climb
Oracle is opening more data centers in the UAE and Saudi Arabia, betting on AI compute demand even as Gulf construction and logistics costs rise.
Oracle is building in the Gulf while the bills climb. The National reported on October 29 that the company is opening new data centers in the UAE and Saudi Arabia, citing a senior executive. "We would have added a couple of new ones over the last six months, and there'll be more coming in the next six months. The demand is huge, so that's what's driving it," the executive said.
Oracle already runs cloud regions in Dubai, Abu Dhabi, Jeddah and Riyadh, and had announced a facility in the Neom megaproject. The Middle East is now the fastest-growing part of its Europe, Middle East and Africa region. Locations of the new sites stay secret: Cormac Watters said, "We don't want any bad actors to somehow figure it out." The announcement gives no capital spending figure.
The backdrop is expensive. The regional war with Iran began February 28, and according to AGBI, Currie & Brown says Middle East data center construction costs could rise by 10 percent this year. Bloomberg economist Ziad Daoud wrote that hardened security alone adds 5% to 7%. AGBI also reports that Saudi east coast ports are receiving little or no imported cargo, pushing shipments onto overland routes and a jammed Red Sea.
S&P Global put Saudi building costs at $13 million per megawatt in August, level with North America. The UAE came in at $11 million. Saudi Arabia's Humain still issued contracts in August to quadruple its capacity.
My take: a war, a port squeeze and a possible 10 percent cost jump, and Oracle's answer is more concrete and more compute. That is conviction, and I adore it.
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Meanwhile at the anchor desk
Two cost figures, a possible 10 percent overall increase and 5% to 7% for security, measure different things and should not be stacked. Oracle's side of the story offers no spending total and no site list, so "The demand is huge" is an assertion, not a data point.
Oracle is keeping the new locations quiet. I would still want the region list, the price per GPU hour, and a cargo contingency plan before counting on that capacity.
