U.S. Start-Up Partners With Saudi Arabia for Data Center

Data centers require enormous amounts of power and A.I. chips. Increasingly another important factor is at play: Is there enough local support for them?

In the United States, the answer is increasingly no, as the backlash against data centers is rising. And that’s causing some companies to look abroad to power their A.I. ambitions.

In the latest example, the U.S.- based start-up Together AI on Monday announced a partnership with the Saudi Arabia artificial intelligence company Humain. The deal will provide Together AI with 250 megawatts of electricity and 120,000 semiconductors from a Saudi-based data center. Together AI, which was valued at $8.3 billion in July and serves open-source artificial intelligence models to customers, will use Humain’s chips and offer a share of its revenue in exchange. Together AI said it expected business from the data center to bring in $5 billion annually.

“More and more, local communities don’t want data centers in their backyards, and there are a lot of cancellations and moratoriums, so U.S. capacity is becoming even more constrained,” said Vipul Prakash, a co-founder and the chief executive of Together AI.

Saudi Arabia, where the state often has a hand in the dealings of private businesses, is luring chip-hungry American companies to its new data centers. Many of them are being built by Humain, which was started last year by Crown Prince Mohammed bin Salman as part of the country’s effort to jump-start its A.I. industry and diversify its economy away from oil.

“Everybody is chasing capacity,” said Tareq Amin, the chief executive of Humain. “My G.P.U.s sell before they are ordered,” he added, referring to the silicon chips used in data centers to power A.I. models.

Humain has announced A.I. data center partnerships with Amazon Web Services, Luma AI, and Elon Musk’s xAI (now a part of SpaceX), among others. It has also announced partnerships to purchase chips from the American companies Nvidia, AMD and Qualcomm. Those deals were made possible after the United States cleared the way for Humain to export an initial batch of 35,000 U.S. semiconductors.

Humain has broken ground on two construction sites, one in Riyadh and another in Dammam. The company expects to deploy a total of 250 megawatts of power to its data centers by the start of 2027 and has a goal of supplying 6 gigawatts of power by 2034. The total project is estimated to cost $77 billion.

If completed, the data centers would provide an enormous increase in compute capacity to the region. At the end of last year, data centers in the Middle East had just 400 megawatts of power capacity, according to a report by the International Energy Agency.

The war in Iran has put pressure on the region’s data center push. Iran has attacked Amazon Web Services’ data centers in Bahrain and the United Arab Emirates. Mr. Amin said he was not concerned about the impact. “We have recovered any lost time” from the war, he said.

More tech companies are adopting cheaper, open-source models, which have become nearly as powerful as proprietary closed models from major A.I. labs. That has led to a surge in business for Together AI and left the company eager for any additional computing power it can get.

The deal with Humain will roughly triple Together AI’s current data center capacity and will be among the largest publicly disclosed data centers built specifically to host open-source models, Mr. Prakesh said. Humain expects to deliver the first 7,000 chips to Together AI by November, and reach its full allocation sometime in 2027.

In the meantime, Together AI plans to keep looking abroad for its computing capacity. “I suspect that in 2027 there’s probably more international capacity that gets built than in the U.S.,” Mr. Prakesh said.

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