[News] Huawei and China’s Cloud Giants Reportedly Gain Ground in Middle East amid AI Ambitions

Amid tightening U.S. restrictions on AI, Chinese cloud companies like Huawei, Tencent and Alibaba seem to be gaining ground on an unexpected market: the Middle East. According to Rest of World, they are steadily gaining ground in the region’s digital infrastructure race, closing the gap with their U.S. rivals.

As noted by Rest of World, Chinese cloud providers stand out in the Middle East by fully embracing AI, something U.S. companies have been slow to adopt. While U.S. firms face growing scrutiny over data governance, their Chinese rivals benefit from high-level agreements that smooth their market entry and operations, the report adds.

The report highlights that Chinese companies also stand out due to their close alignment with local government priorities and competitive pricing. They’ve formed key partnerships and customized their solutions to address regional concerns around security and sovereignty, the report suggests.

Actually, U.S. CSP giants like Amazon, Microsoft, Google, and Oracle have spent years developing regional tech ecosystems, establishing data centers throughout the Gulf, as per Rest of World.

According to Wilson Center, Western CSP giants have firmly planted their flags across MENA’s cloud landscape. AWS and Google each operate three cloud regions, Microsoft has rolled out four Azure regions, while Oracle leads with five launched since 2020. IBM has also joined in, setting up data centers in Egypt and the UAE, as per the organization.

Better Late than Never: Huawei’s Emergence

Despite the early lead of U.S. cloud giants, Chinese providers have gained significant momentum by forming strong partnerships with key regional telecoms such as STC, E& Enterprise, du, Zain, OmanTel, and Ooredoo, according to Rest of World.

Among them, Huawei stands out as one of the most ambitious. A Reuters report from 2023 highlighted that the Chinese tech giant planned to invest $400 million in Saudi Arabia’s cloud region by 2028. Later that year, it took a significant step forward by launching a new cloud data center in Riyadh, boosting its online services across the Middle East, the report indicated.

According to Rest of World, Saudi Arabia is adopting a cloud-first policy, prioritizing online services for government projects, Rest of World reports. In response, Huawei has established four cloud facilities, including a high-speed data center with ultralow latency to capitalize on this opportunity, as per the report.

Other big Chinese CSPs are also catching up. According to Wilson Center, Alibaba has launched cloud regions in both Saudi Arabia and the UAE, while Huawei runs cloud regions in Egypt and Saudi Arabia. In March 2024, Tencent also announced plans to expand its cloud operations into Saudi Arabia and the UAE.

Middle East: China’s Growing Presence in Tech

Wilson Center further explains that China’s push into the MENA region’s digital space is a key pillar of its Digital Silk Road—an extension of the broader Belt and Road Initiative (BRI).

Notably, by 2023, China had become the primary trading partner for nearly every country in the region, as per Wilson Canter.

It is also worth mentioning that according to the organization, over the past two years, Chinese manufacturers have risen to challenge Western companies with highly competitive products. In the drone sector alone, the UAE ordered over 500 drone systems between 2010 and 2024, with more than a third of those contracts going to Chinese manufacturers like AVIC and CASC, as highlighted by Wilson.

With these moves, China is firmly establishing itself as a key player in the region’s tech landscape.

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(Photo credit: Huawei)