Abu Dhabi, UAETuesday 25 June 2019

Google parent Alphabet said to be in talks with Saudi Aramco over data centre JV

The potential vehicle would build data centres around the kingdom, Wall Street Journal reports

Googles parent Alphabet and Saudi Aramco are reportedly in talks to build data centres in the kingdom. AP
Googles parent Alphabet and Saudi Aramco are reportedly in talks to build data centres in the kingdom. AP

Saudi Arabia’s state-owned oil company is reportedly in talks with Alphabet, the parent of Google, to build a string of data centres around the kingdom, as the region’s biggest oil producer looks to diversify its economy and become more digitally advanced.

Alphabet and Aramco have discussed forming a joint venture that would build data centres across Saudi Arabia, ultimately creating a technology hub inside the kingdom, the Wall Street Journal reported on Thursday.

Such a joint venture could be listed on the Saudi stock exchange, the Tadawul, sources told the paper.

However, it is unclear whose data the centres would house or which entities would control them.

The talks have reportedly been ongoing for months and have involved Alphabet chief executive Larry Page, the paper said. The National has contacted Saudi Aramco for more information. Google and Alphabet declined to comment.

Saudi Crown Prince Mohammed bin Salman is spearheading a major strategy, called Vision 2030, aimed at diversifying the nation’s oil-dependent economy, and technology is a key area of focus.


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The government aims to increase the penetration of internet users in the kingdom to 85 per cent from 63.7 per cent, according to the 2020 National Transformation Plan. A network of data centres could provide the digital infrastructure for a nascent Saudi technology industry.

Meanwhile, Google wants to ramp up its activities in Saudi Arabia over the next three years and beyond, to tap into the largest market in the Middle East.

“We are going deep into enabling the digital transformation of Saudi Arabia with a multi-year, multi-project initiative,” Lino Cattaruzzi, the managing director for Google Mena, told The National in an interview this week.

Google Mena last month formed a dedicated Saudi team – many of which are new recruits including some Saudi nationals – based at its regional headquarters in Dubai.

The team will be responsible for growing the company’s activities in Saudi Arabia. It is currently researching the market and assessing possible business opportunities and ways to increase digital connectivity in the kingdom.

Alphabet missed its fourth quarter profit forecasts as steady advertising sales growth was offset by increased spending to promote its consumer gadgets, YouTube video app and cloud computing services, the US-based company said on Thursday.

Shares of Alphabet dipped more than 5 per cent after hours, before steadying with a 2.7 per cent loss at $1,149.93.

A stake in Saudi Aramco is to be listed on the Tadawul, and potentially stock exchanges outside the kingdom, later this year as part of government diversification efforts.

Updated: February 2, 2018 03:26 PM