Oracle Corporation has declared its intention to invest $1.5 billion in Saudi Arabia over the next several years, as it seeks to expand its cloud footprint in the kingdom. The company plans to open its third public cloud region in Riyadh and increase the capacity of its cloud region in Jeddah. The announcement was made as global tech firms converged for a major technology conference in the capital city of Riyadh.
The increased demand for cloud computing services has prompted tech companies like Oracle, Microsoft, Amazon, and Google to set up data centres across the world to improve data transfer speeds. The government of Saudi Arabia has encouraged international companies to invest in the kingdom and move their regional headquarters to Riyadh in order to benefit from government contracts.
Though Oracle lags behind its larger competitors in the race to capture a significant share of the cloud computing market, it was one of the first major tech companies to open a data centre in Saudi Arabia. The kingdom has devoted billions of dollars to its economic transformation, known as Vision 2030, led by Crown Prince Mohammed bin Salman. However, it has struggled to attract foreign direct investment (FDI), which is a crucial pillar of Vision 2030 and aims to diversify the economy away from oil. The FDI reached just under $4.1 billion in H1 2022, which is far short of the target of $100 billion set for the end of this decade.
The government of Saudi Arabia has been trying to encourage foreign firms to set up headquarters in the country and has given them until the end of 2023 to comply. Failure to comply may result in losing out on government contracts. Oracle has been working closely with the government in this regard.
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