Oracle Corp, the world's largest database management company, has announced plans to invest $1.5 billion in Saudi Arabia and open its third public cloud region in Riyadh.

The company pointed to expanded demand for cloud infrastructure capabilities in the region. It already operates a cloud region in Jeddah opened in 2020 – which will be expanded as part of the investment – and is set to build one in Neom, the planned smart city in Tabuk Province in northwestern Saudi Arabia. The likes of Microsoft, Amazon and Google have also set up data centres in the Middle East.

The investment is included in an MoU that Oracle has signed with the Ministry of Communications and Information Technology (MCIT). It was signed during Oracle CEO Safra Catz's recent visit to Riyadh.

Richard Smith, executive vice president, technology – EMEA, Oracle, said: “Oracle’s investment will rapidly accelerate the cloud transformation across Saudi Arabia’s business and public sector. Oracle Cloud delivers pioneering innovation in technologies like AI, Machine Learning, and IoT, and it will help fuel the economic growth and digital transformation that is an integral part of the Saudi Vision 2030.”

Saudi Vision 2030 is part of de facto ruler Crown Prince Mohammed bin Salman’s transformation plan to both modernise the Kingdom’s image and diversifying its economy away from oil. To date, Saudi Arabia has struggled to attract foreign direct investment (FDI), reaching less than $4.1 billion in the first half of 2022 – a far cry from the $100 billion FDI target it has set for the end of the decade.

The government has urged companies to set up headquarters in the country or risk missing out on lucrative government contracts. Foreign firms have been given until the end of 2023 to comply.

While Oracle has been working with the government, Saudi Arabia has been trying to encourage foreign firms to set up headquarters in the country or risk losing out on government contracts and has given them until the end of 2023 to comply.

Nick Redshaw, a senior vice president at Oracle, said in an interview that the company is “working closely with the Saudi government to finalise plans for that regional headquarter requirement and we will announce them as we finalise that with them.”

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