Tencent Holdings Ltd. (OTC:TCEHY) is accelerating its global cloud push by targeting the Middle East for new data centers, signaling a bid to capture surging regional demand for AI and cloud services as Big Tech rivals pour billions into infrastructure across the Gulf.
Tencent Cloud CEO Dowson Tong told CNBC on Tuesday that the company is actively exploring building data centers in the Middle East to support cloud customers.
Tencent plans to expand the number of its "availability zones," which serve as hubs for clusters of data centers, over the next 12 to 18 months across Asia Pacific, Europe, and the Middle East.
Saudi Foothold And Regional Customers
Tong said Tencent intends to increase investment in the Middle East and strengthen its local partnership network.
Last year, Nvidia Corp. (NASDAQ:NVDA), OpenAI, and partners committed to developing large-scale AI infrastructure projects in the United Arab Emirates.
Tencent has already launched an availability zone in Saudi Arabia and serves customers there, including Keeta, the international food delivery arm of Meituan.
Gaming companies in the region also use Tencent's Saudi-based cloud services, Tong said.
Big Tech Ramps Cloud And AI Investments
Tencent's move mirrors broader momentum from rivals.
Alibaba Group Holding Ltd. (NYSE:BABA) accelerated its Middle East expansion to capture rising demand for cloud and AI services, using new data centers and targeted pricing to grow its international footprint.
In October, Alibaba Cloud opened a second data center in Dubai, nearly a decade after its first, to meet growing regional demand for cloud computing and artificial intelligence.
Alibaba Cloud is also building local partnerships, including one with Abu Dhabi-backed digital lender Wio Bank, to deploy AI services faster.
Microsoft Corp. (NASDAQ:MSFT) and Nvidia are accelerating their Middle East expansion after the U.S. approved shipments of Nvidia's AI chips to the United Arab Emirates.
Microsoft reaffirmed its long-term partnership with G42, the UAE's sovereign AI company, under a broader investment plan totaling $15.2 billion between 2023 and 2029.
That includes $1.5 billion in equity investment, more than $10 billion for AI and cloud data centers, and over $3 billion in operating expenses.
Microsoft is also expanding local talent and research efforts through initiatives such as the Global Engineering Development Center and the AI for Good Lab in Abu Dhabi.
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