Saudi Arabia is quietly laying the groundwork for a new kind of global influence—one built not on oil exports, but on computing power. With solar energy prices dropping to just over one cent per kilowatt-hour, the kingdom is positioning itself as one of the world’s cheapest locations to run large-scale artificial intelligence infrastructure.

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Roughly two hours south of Jeddah, along the Red Sea coast, a stretch of desert is being reshaped into a strategic energy hub. The Al Shuaiba Solar Farm, spread across nearly 50 square kilometres, sits at the centre of this ambition. Its first phase is projected to generate around 600 megawatts of electricity at a cost of 3.9 Saudi halalas per kilowatt-hour—slightly more than one US cent. To put that into perspective, this is about one-twentieth the cost of electricity generated by the UK’s Hinkley Point C nuclear plant.

This ultra-cheap power is not meant primarily for households or conventional industries. Instead, Saudi planners intend to channel most of it into massive data centres purpose-built for artificial intelligence. As AI models grow larger and more energy-intensive, electricity has emerged as one of the sector’s biggest cost constraints. In many regions, power prices now determine where advanced computing can realistically scale.

At the heart of AI economics are two recurring expenses: high-performance hardware and the electricity required to run it around the clock. Cutting corners on chips rarely pays off, as state-of-the-art models demand the most advanced processors available. Energy, by contrast, offers room for dramatic cost reduction. This is where Saudi Arabia sees its opening.

Rather than chasing incremental efficiency improvements, the kingdom is making a structural bet—producing renewable power at enormous scale and at near-symbolic prices. By doing so, it aims to sharply lower the cost of AI inference, the everyday process of querying models and generating responses. In an industry where operating costs increasingly shape competitiveness, Saudi Arabia’s solar-powered data centres could give it a decisive edge.