QST considers cashing in on Saudi business

Data centre company Quantum Switch Tamasuk is considering strategic options, including a sale of its Saudi business, four people with knowledge of the matter told Reuters, in a deal that could attract renewed interest from global buyout firms seeking a slice of the Gulf’s AI boom.

QST was set up as a joint venture between Saudi Arabian infrastructure developer Tamasuk and UK-based data-centre player Quantum Switch. It has operating projects, and planned future ones, in Saudi Arabia.

The company has appointed Rothschild to advise on any potential transaction, said the four sources, who declined to be named because the matter is not public.

A deal could value the business at a level significantly higher than $500 million, one of the sources said. Deliberations are at an early stage and the company has not decided whether it will pursue a sale or other options, the sources said.

Its two data centres in Dammam, in the east of the kingdom, have a total capacity of 9MW each, enough to power up to 9,000 homes depending on factors such as location, energy efficiency and power source.

Global private equity groups operating in the region had shown interest in the assets that may be for sale, the sources said.

QST, Tamasuk and Quantum Switch did not respond to requests for comment. Rothschild declined to comment.

Further reading:

• What’s happening with data centres in the Gulf?
• Saudi Arabia starts work on huge government data centre
• UAE’s Khazna enters Saudi Arabia with first data centre

Saudi Arabia and other Gulf countries are pouring billions of dollars into data-centre infrastructure as they strive to become global AI hubs, viewing the sector as a way to help diversify their economies away from hydrocarbon revenue.

They are betting that abundance of land and access to cheap energy will lure hyperscalers that have been driving AI adoption, such as Alphabet’s Google, Microsoft and Meta.

Challenges remain in the region in areas including data governance, access to chips and top-tier talent in a fiercely competitive global market.

Foreign investors have also been showing growing interest in regional data centres, not just in oil and gas pipelines, especially in the UAE.

Last year, KKR bought a minority stake in Dubai-based data-centre company Gulf Data Hub, while Silver Lake invested in Khazna Data Center Holding, which is involved in the construction of a massive data-centre campus in Abu Dhabi.