Saudi Arabia Data Center Colocation Market Overview

Market Size in 2025: USD 674.8 Million

Market Size in 2034: USD 1,769.2 Million

Market Growth Rate 2026-2034: 11.31%

According to IMARC Group's latest research publication, "Saudi Arabia Data Center Colocation Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2026-2034", The Saudi Arabia data center colocation market size was valued at USD 674.8 Million in 2025. Looking forward, IMARC Group estimates the market to reach USD 1,769.2 Million by 2034, exhibiting a CAGR of 11.31% during 2026-2034.

How AI is Reshaping the Future of Saudi Arabia Data Center Colocation Market

• AI-powered data center management systems optimize cooling efficiency and power distribution across Saudi colocation facilities, reducing operational costs while supporting high-density computing requirements.
• Machine learning algorithms predict equipment maintenance needs and capacity planning requirements, enabling colocation providers to prevent downtime and allocate resources efficiently across multiple client environments.
• AI-driven workload optimization helps Saudi colocation facilities manage mixed tenancy efficiently, balancing compute resources while maintaining service level agreements for diverse enterprise customers.
• Automated security systems powered by AI enhance physical and cyber protection in colocation centers, detecting anomalies and responding to threats faster than traditional monitoring approaches.
• Intelligent energy management platforms leverage AI to optimize renewable energy integration and load balancing, supporting Saudi Arabia's sustainability goals while reducing power consumption costs.

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How Vision 2030 is Transforming Saudi Arabia Data Center Colocation Industry

Saudi Arabia’s Vision 2030 is transforming the data center colocation industry by positioning digital infrastructure as a core pillar of economic diversification and technological advancement. The initiative drives strong government investment in cloud adoption, smart cities, and digital transformation, increasing demand for scalable and reliable colocation facilities. Vision 2030’s goal of making the Kingdom a regional digital hub supports submarine cables, fiber-optic expansion, and improved connectivity that attract global cloud and content providers. Megaprojects such as NEOM and the Red Sea Project generate significant demand for high-performance colocation supporting AI, IoT, and real-time analytics. Supportive regulations, incentives, and data sovereignty policies encourage international operators while strengthening local partnerships. The focus on renewable energy promotes sustainable colocation operations with lower operating costs. Talent development programs ensure a skilled local workforce. Strong data protection and business continuity requirements boost enterprise confidence. Overall, Vision 2030 positions colocation as critical infrastructure for Saudi Arabia’s digital economy and regional technology leadership.

Saudi Arabia Data Center Colocation Market Trends & Drivers:

Saudi Arabia's data center colocation market is experiencing robust growth, driven by rapid digital transformation initiatives across industries and government-led programs under Vision 2030 prioritizing cloud adoption and smart technologies deployment. Enterprises increasingly outsource IT infrastructure to colocation facilities rather than building expensive in-house data centers, seeking scalable, cost-effective solutions providing state-of-the-art infrastructure without heavy capital expenditure. Growing internet penetration rates and escalating data consumption from streaming services, e-commerce platforms, and digital communications create substantial demand for robust data storage and processing capabilities.

The expanding IoT ecosystems and smart city initiatives, particularly NEOM and Red Sea Project developments, generate massive data volumes requiring low-latency processing and storage solutions. Hyperscale cloud providers including AWS, Microsoft, Google, and Oracle establish regional presence through colocation partnerships, meeting data localization requirements and serving growing demand for cloud services across enterprises and government sectors. Rising cybersecurity concerns and regulatory compliance requirements drive organizations toward colocation facilities offering enhanced physical security, 24/7 monitoring, disaster recovery capabilities, and compliance certifications meeting stringent data protection standards. Strategic geographic positioning connecting Europe, Asia, and Africa through submarine cables landing in Jeddah and Dammam enhances Saudi Arabia's attractiveness as regional data center hub serving multiple markets efficiently.

Saudi Arabia Data Center Colocation Market Industry Segmentation:

The report has segmented the market into the following categories:

Product Insights:

• Retail Colocation
• Wholesale Colocation

Application Insights:

• Small and Medium Enterprises
• Large Enterprises

Breakup by End Use Industry:

• BFSI
• Manufacturing
• IT and Telecom
• Energy
• Healthcare
• Government
• Retail
• Education
• Entertainment and Media
• Others

Breakup by Region:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

Recent News and Developments in Saudi Arabia Data Center Colocation Market

• July 2025: Al Moammar Information Systems Company struck agreement to provide additional data center capacity with Saudi Data Centre Fund, expanding colocation infrastructure across the Kingdom.
• February 2025: Equinix announced plans to develop a hyperscale data center in Jeddah designed for hyperscale, cloud, AI, and enterprise workloads serving regional demand.
• January 2025: NEOM and DataVolt signed landmark agreement to develop large-scale sustainable data center in Oxagon, supporting Saudi Arabia's environmental goals.

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