Saudi Arabia's largest telecom operator, Saudi Telecom Company (STC), announced on Thursday the formation of a joint venture with local artificial intelligence firm Humain to jointly develop and operate data centers.

The two companies have signed a memorandum of understanding to establish the joint venture, with Humain holding a 51% stake and STC owning the remaining 49%.

Saudi Arabia is accelerating its development in the AI sector to capitalize on the growing demand for computing power, as part of its broader strategy to diversify the economy and reduce reliance on oil revenues.

Humain, an AI company backed by Saudi sovereign wealth fund Public Investment Fund (PIF), has secured multiple partnerships, including collaborations with Elon Musk’s xAI and Blackstone-backed AirTrunk, to develop data center projects in the country. The company aims to achieve approximately 6 gigawatts of data center capacity by 2034.

The newly formed joint venture will focus on building infrastructure capable of supporting up to 1 gigawatt of load, with an initial deployment capacity of up to 250 megawatts.