- Saudi Arabia is placing a big bet on sovereign AI by developing the “data embassy” model, where other nations’ data is stored in Saudi Arabia but remains under the legal jurisdiction of the owning country.
- This concept was first implemented by Estonia in 2017, followed by Monaco, with both placing data centers in Luxembourg to protect national data from cyber and climate risks.
- With abundant solar energy and a strategic location connecting Europe, the Middle East, and Asia, Riyadh wants to export data instead of oil, becoming a storage hub for countries needing to protect sensitive data.
- However, major limitations include a lack of water for system cooling and the absence of an international legal framework for this type of center.
- Professor Viktor Mayer-Schönberger (Oxford University) notes that this model “depends entirely on trust between nations,” as it requires complex bilateral treaties to regulate access and adjudication.
- To lead the way, Saudi Arabia introduced the “Global AI Hub Law” in April 2025, proposing three levels of legal protection for data embassies – ranging from full autonomy to hybrid protection supported by Saudi courts.
- If passed, Saudi Arabia would become the first G20 nation to have a specific legal framework for data embassies.
- This is also part of the US-Saudi strategic AI partnership, which includes “building and developing advanced AI infrastructure.” Although there is no specific agreement with Washington yet, Riyadh is leveraging its advantages in low costs for land, energy, and capital to attract Western partners.
- Palo Alto Networks observes that “data sovereignty” remains a vague concept that varies among European nations, while a data embassy can be seen as an extension of extraterritorial rights under GDPR standards.
- Low costs, abundant power, and a strategic location make Saudi Arabia an ideal destination for data centers serving Europe – especially as the continent faces power shortages for AI.
- However, experts remain divided: one side sees this as a turning point reshaping global digital sovereignty, while the other warns of security and legal risks without clear bilateral treaties.
📌 Saudi Arabia is placing a big bet on sovereign AI by developing the data embassy model, where other nations’ data is stored in Saudi Arabia but remains under the legal jurisdiction of the owning country. Saudi Arabia proposed the “Global AI Hub Law” in April 2025, suggesting three levels of legal protection for data embassies: from full autonomy to hybrid legal protection supported by Saudi courts. If the law is passed, Saudi Arabia will become the first G20 nation to have a specific legal framework for data embassies.
