China’s Tencent plots Middle East cloud computing expansion

Tencent The company plans to increase its cloud computing business outside of China and expand its data center footprint in the Middle East, a senior executive of the Chinese technology giant told CNBC.

Dowson Tong, CEO of Tencent’s cloud group, told CNBC that the company plans to expand the number of “availability zones” identified as locations for potential data center clusters for cloud services in countries in Asia Pacific, Europe and the Middle East over the next 12 to 18 months.

In the Middle East, Dowson added that Tencent is “actively” exploring building data centers there to serve its cloud customers.

“We plan to increase our investment in the region and establish a stronger partnership network. That’s all in the plan.” he said, declining to give more specific timelines or countries where the exact availability zones would be located.

Tencent’s planned expansion in the Middle East comes as countries in the region attract major investments from tech giants to build AI data centers and other computing infrastructure.

Last year, Nvidia, OpenAI and others decided to build a massive AI infrastructure project in the United Arab Emirates under the Stargate brand.

In August, analysts at Gartner predicted that information technology spending in the Middle East and North Africa region would rise nearly 9% annually to $155 billion in 2025, outpacing global growth.

Tencent has already opened an availability zone in Saudi Arabia. Further expansion in the Middle East would likely put it in more direct competition with US giants. Amazon, Microsoft And Google.

Dowson said Tencent already has customers in Saudi Arabia who purchase cloud services such as Keeta, the Chinese giant’s international food delivery subsidiary. Meituan. Dowson added that Tencent, one of the world’s largest gaming companies, also has gaming companies in the region that use Saudi-based cloud services.

While the bulk of Tencent’s revenue still comes from games, the company is looking to diversify its business by expanding into other areas, including cloud computing.

Tencent hopes to differentiate itself from U.S. rivals by using its strong customer base in China to expand internationally. For example, customers using Tencent’s cloud in China can also purchase the company’s services abroad.

The Middle East is becoming an important expansion area for Chinese companies.

Lenovo, the world’s largest computer company, has established its regional headquarters in Saudi Arabia and is currently building a manufacturing facility there.

“I think there’s a lot of initiative and investment going into the Middle East. So we’re very excited about the opportunity there,” Lenovo CFO Winston Cheng said in an interview with CNBC last week.