The Data Center Exodus: Saudi Arabia’s Unlikely Gain from America’s Loss

The partnership between San Francisco-based Together AI and Humain, a Saudi Arabian AI company founded by Crown Prince Mohammed bin Salman, has secured access to 250 megawatts of electricity from data centers in the Kingdom. This development is a stark reminder that American companies are fleeing the backlash against data centers at home by setting up shop in countries with more welcoming regulatory environments.

Saudi Arabia’s ambitious plans to diversify its economy beyond oil have made it an attractive destination for foreign investment, including American tech companies seeking to escape the growing criticism of data centers. The U.S. government has also been promoting Saudi Arabia as a hub for AI infrastructure through initiatives such as the 2025 agreement with the Saudi government, under which the latter agreed to spend $20 billion on new data centers within the U.S.

The construction of these facilities in the Kingdom raises concerns about their impact on local communities and the environment. While proponents claim that data centers will bring job growth and reduced water usage, these benefits have yet to be fully realized. The backlash against data centers has been driven by worries about their effects on public health and infrastructure.

The Brookings Institute has warned that the concentration of power and resources in countries like Saudi Arabia poses serious risks for global security and stability. This trend also raises concerns about data sovereignty and the potential for data breaches or cyber attacks.

Notably, other countries such as Canada and Germany have seen an influx of tech companies seeking more favorable regulatory environments. However, the Kingdom’s ambitions to become a hub for AI infrastructure come with questions about its commitment to transparency and accountability. Critics point out that Saudi Arabia’s human rights record is far from exemplary.

The global tech industry must grapple with the implications of data center construction, including their impact on human health. A recent report by the National Institute of Environmental Health Sciences found a link between exposure to high levels of electromagnetic radiation and increased cancer risk, reproductive problems, and neurological disorders.

Investing in research on these facilities is essential for prioritizing human health and well-being. It’s also crucial to work with communities to develop more sustainable approaches to AI infrastructure. The stakes are high, and the consequences of data center construction will be far-reaching.