Saudi Arabia's data center capacity is projected to boom, but financing remains a major challenge for developers seeking to build AI infrastructure.

Saudi Arabia's data center capacity is forecast to reach 1 gigawatt by 2030, making it the fastest-growing Gulf market in a sector awash in cash and FOMO. The pipeline of announced projects is larger still—PIF's HUMAIN alone is targeting more than 6 GW in the coming decade. Financing even half of that will require up to $32 billion in debt, more than the kingdom's banks are likely to be willing to assemble themselves, according to a report from consulting firm Alvarez & Marsal.

"Digital infrastructure is now one of the largest single sources of new project debt in our pipeline," Kurt Davis Jr., the report's author, told Semafor. The pace is being driven by vast government demand, data sovereignty legislation that is keeping caches in-country, and hyperscalers increasingly looking to lease data center space rather than build in new markets. Cheap power and plentiful land further strengthen the proposition.

Institutional money is already circling: KKR earmarked part of its massive new infrastructure fund to back Gulf tech build-outs last week. This bullishness emerges just five months after Iranian drones struck AWS sites in the UAE and Bahrain, which had cast doubt on the sector's regional future at the time. Investor memory, it seems, is shorter than data center infrastructure itself.