Oracle To Invest USD 1.5B in Saudi Arabia

Oracle Corp plans to invest $1.5 billion in Saudi Arabia over the next few years as it expands its cloud footprint and opens its third public cloud region in Riyadh, according to a company official.

Increased demand for cloud computing has prompted technology companies such as Oracle, Microsoft, Amazon, and Alphabet's Google to establish data centres around the world in order to accelerate data transfer.

Saudi officials have urged international corporations to invest in the kingdom and relocate their regional headquarters to Riyadh in order to win government contracts. "We are currently finalising plans to open the Riyadh region. We are still working with our suppliers to determine an exact date "Oracle senior vice president Nick Redshaw stated in an interview from Dubai.

Redshaw stated that the investment will be spread out over several years without going into specifics. He also stated that Oracle would increase the capacity of its cloud region in Jeddah, which it launched in 2020.

The announcement came as global technology companies gathered in the Saudi capital for a major tech conference. Despite trailing its larger competitors in the race to corner the cloud computing market, Oracle was one of the first large tech companies to open a data centre in Saudi Arabia.

The kingdom has spent hundreds of billions of dollars on Vision 2030, an economic transformation led by de facto ruler Crown Prince Mohammed bin Salman.

However, it has struggled to attract foreign direct investment (FDI), which is one of the Vision 2030 pillars aimed at diversifying the economy away from oil.

FDI reached just under $4.1 billion in the first half of 2022, a fraction of the ambitious $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 and has given them until the end of 2023 to comply.  "We are working closely with the Saudi government to finalise plans for that regional headquarter requirement and we will announce them as we finalise that with them," Redshaw said.   

Oracle has also received contracts from the crown prince's $500 billion NEOM project, a futuristic megacity and economic zone being built on the Red Sea coast. NEOM is one of our largest cloud consumers in Saudi Arabia, according to Redshaw.