As countries race to build domestic data centers in the name of sovereign AI, Saudi Arabia is betting on a more creative idea: data embassies.
A data embassy is where data is stored outside of a country’s physical borders but operates under its laws, much like a diplomatic embassy.
The concept is not new. Estonia established the first data embassy in 2017 and there’s only been one other since, from Monaco. Both embassies are in Luxembourg and hold a backup of the countries’ critical data, set up as a security measure against cyber and climate risks.
As AI scales, the concept could gain momentum as a way to build data centers overseas — in places that have plenty of resources and power, given energy is one of Europe’s biggest bottlenecks in building AI infrastructure — while still operating within the laws of the developer’s country.
At least, that’s what Saudi Arabia is counting on as it positions itself as an exporter of data rather than oil. Saudi Arabia is betting hard on solar energy, but its water resources — needed to cool data centers — are scarce, dousing the idea in doubt. It comes as the country battles its neighbors to become an AI hub as global investors and tech firms turn to the Middle East for its deep pockets and influx of talent, representing a potential shift in global power.
