DUBAI – Data center company Quantum Switch Tamask is considering strategic options including selling its Saudi operations, four people familiar with the matter told Reuters, in a deal that could draw renewed interest from global acquirers seeking a piece of the Gulf region’s AI boom.
QST was established as a joint venture between Saudi Arabian infrastructure developer Tamasuk and UK-based data center company Quantum Switch. The company operates projects in Saudi Arabia and also plans future projects.
The company has appointed Rothschild & Co. to advise on the potential deal, said four people familiar with the matter, who asked not to be named because the matter is private. If the deal goes through, the business could be valued at well over $500 million, one of the people said. Talks are in the early stages and no decision has been made yet on whether to pursue a sale or other options, the people said.
The two data centers in Dammam, in the eastern part of the kingdom, each have a total capacity of 9 megawatts (MW), enough to power up to 9,000 homes, depending on factors such as location, energy efficiency and power supply.
A global private equity group active in the region had expressed interest in the assets that could be put up for sale, the people said.
QST, Tamasuk, and Quantum Switch did not respond to multiple requests for comment. Rothschild declined to comment.
Saudi Arabia and other Gulf states are pouring billions of dollars into data center infrastructure in a bid to become a global AI hub, seeing the fast-growing sector as a way to help diversify their economies away from hydrocarbon revenues.
They are betting that plentiful land and access to cheap energy will tempt hyperscalers such as Alphabet Inc.’s Google, Microsoft and Meta, which have been driving AI adoption. Challenges remain in the region in areas such as data governance, access to chips, and top talent in a competitive global market. Foreign investors are also increasingly interested in regional data centers as well as oil and gas pipelines, particularly in the UAE.
Last year, KKR bought a minority stake in Gulf Data Hub, a Dubai-based data center company, and Silver Lake invested in Khazna Data Center Holding, which is building a large data center campus in Abu Dhabi.
(Reporting by Federico Maccioni in Dubai; Editing by Anusha Sakowi and Matthew Lewis)
