Saudi Arabia Is Building AI Cities in the Desert

Saudi Arabia has made artificial intelligence central to its economic diversification programme, treating it as both an industry to build and a tool to modernise the state.

The strategic frame:

The kingdom's long-term economic plan aims to reduce dependence on oil revenue, and technology features prominently. A national data and AI authority coordinates strategy, and state investment vehicles have committed very large sums to AI infrastructure, companies and partnerships.

Saudi Arabia has pursued compute capacity aggressively, with data centre investment, partnerships with major chip and cloud companies, and state-backed entities established specifically to develop AI infrastructure and services.

Arabic language models have been a priority, developed domestically and in partnership with international institutions, serving both practical needs and the goal of establishing regional technological leadership.

Energy and infrastructure:

The kingdom's advantages are electricity and land. Abundant energy, vast available space and state capacity to build quickly make large infrastructure projects feasible on timelines other countries cannot match.

Solar potential is excellent, and substantial renewable projects are underway, partly to free hydrocarbons for export and partly to meet the sustainability expectations of international partners.

The giga-projects, including the planned developments in the northwest, incorporate extensive technology ambitions, with autonomous transport, sensor networks and AI-managed utilities featuring in plans. These projects have attracted scepticism about feasibility and timelines, and their eventual scale remains uncertain.

Applications:

The national oil company is among the world's most technically sophisticated energy operators, applying machine learning to exploration, reservoir management, predictive maintenance and industrial safety at enormous scale.

Government services digitisation has been substantial, with citizen-facing platforms consolidating public services.

Healthcare, education and religious tourism logistics, managing the movement of millions of pilgrims, are identified priority applications, the last being a genuinely distinctive optimisation problem.

Talent and education:

Saudi Arabia has invested in universities and research institutions, and its flagship science and technology university recruits international faculty and conducts machine learning research.

The workforce challenge is significant: developing domestic technical capability while relying on imported expertise in the interim. Programmes to train Saudi nationals in AI and data skills are extensive, and localisation requirements push companies to employ citizens.

The kingdom competes with the UAE for regional technology leadership, and both compete for the same limited pool of internationally mobile senior talent.

Constraints:

Water scarcity is extreme, making cooling for data centres an engineering and resource challenge.

International perception affects partnerships and recruitment, with human rights concerns influencing some institutions' willingness to collaborate.

Geopolitical positioning between the United States and China creates the same export control complications faced by the UAE, and access to advanced chips depends on managing those relationships.

Execution risk on very large projects is real, and several ambitious initiatives have been scaled back or delayed.

The outlook:

Saudi Arabia has capital, energy and political will in quantities few countries can match, and it is deploying them at speed.

The question is conversion: whether spending produces durable capability, domestic expertise and companies that survive without state support, or whether it produces infrastructure operated by foreigners serving foreign firms. The next several years, as the compute investments come online and the training programmes produce graduates, will show which.