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Saudi Arabia is poised to emerge as a significant hub for artificial intelligence infrastructure, leveraging its abundant energy resources to fuel the computationally intensive demands of the AI sector, according to Groq CEO Jonathan Ross.
Speaking exclusively to CNBC’s “Squawk Box Europe” from the Future Investment Initiative (FII) conference in Riyadh, Ross highlighted the confluence of factors positioning Saudi Arabia as an ideal location for AI infrastructure development. The nation’s vast and readily available energy resources, a cornerstone of its economy, are attracting considerable interest from major technology firms seeking to establish infrastructure in the region. These developments are strategically aligned with Saudi Arabia’s Vision 2030, a comprehensive plan aimed at diversifying the Kingdom’s economy beyond its traditional reliance on oil revenues.
Ross articulated a compelling vision of Saudi Arabia transitioning into a net exporter of data, facilitated by its energy surplus. He emphasized the logistical and economic advantages of localizing data processing close to the source of energy, rather than incurring the high costs associated with transporting electricity. “One of the fundamental challenges is the export of energy itself. The physical movement of energy is costly and complex, especially when considering the expense of electricity transmission over long distances,” Ross explained.
In contrast, data transmission is “remarkably cost-effective,” according to Ross. “The strategic imperative is to bring data and compute resources together within the Kingdom, enabling AI computations to be performed locally and the resulting insights to be disseminated efficiently.” This approach minimizes energy transportation costs and leverages the Kingdom’s underutilized energy capacity.
Ross further elaborated on the strategic advantages of locating data centers in regions with ample energy resources and relatively low population density. “The optimal location for a data center is not necessarily adjacent to densely populated areas, where land is expensive and energy demand is already high. Instead, it’s in regions where energy is underutilized and land is readily available. The Middle East, with its unique combination of factors, presents an ideal environment for AI infrastructure development.”
The potential cost savings associated with operating AI chips in Saudi Arabia are particularly noteworthy. According to Ross, energy costs in Saudi Arabia are “actually lower than those in some Nordic countries,” despite the latter’s reputation for access to abundant and low-cost renewable energy. This cost advantage, coupled with the Kingdom’s strategic location and ambitious Vision 2030 initiatives, positions Saudi Arabia as a compelling destination for investment in AI infrastructure and a potential game-changer in the global AI landscape. This could attract further investment and potentially foster innovation in AI technologies tailored to the specific needs and challenges of the region.
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