Summary Bullets:
• Qatar-based telecoms group Ooredoo and US chipmaker Nvidia signed a deal for Ooredoo to buy and deploy thousands of Nvidia graphic processing units (GPUs).
• Ooredoo will build its AI cloud services platform and offer GPU-as-a-service to customers across its footprint: Qatar, Algeria, Kuwait, Tunisia, Oman, and the Maldives.
In one of the most significant moves made by any telecoms operator in MENA to turbocharge AI capabilities, Ooredoo Group is boosting its 26 data centers by incorporating Nvidia’s high-density GPUs. It is also becoming the region’s first Nvidia Cloud Provider. As a result, Ooredoo will develop an AI – and an ML-ready platform powered by Nvidia’s stack of software and services, including generative AI (GenAI).
The deal follows a similar one struck by Ooredoo’s Indonesian unit, Indosat, with Nvidia in February 2024 where it was announced that Nvidia’s Blackwell platform will be incorporated into Indosat’s infrastructure to bring sovereign AI cloud and services to Indonesia via a planned $200 million AI data center in Surakarta (Indonesia).
A step up from central processing units (CPUs), GPU chips aid in workload acceleration of heavy processing tasks, offering enterprise customers access to the latest AI capabilities tailored for high-demand computing tasks. Sectors that can significantly benefit from this are infrastructure, energy, and mining, with healthcare, finance, education, and telecommunications also set to profit.
As a Nvidia Cloud Provider, Ooredoo has signaled its intent to be a leading digital infrastructure provider in MENA. Each Ooredoo unit will be able to establish its own local clouds, bringing AI infrastructure closer to both Ooredoo and non-Ooredoo customers, and allow for greater data sovereignty and security in compliance with local laws. Ooredoo stated it is investing $1 billion to boost its data center capacity by 65% by 2030, adding that it is seeing cloud adoption growing by an average of 30% YoY.
The export of advanced proprietary US technology has been a concern to US lawmakers, with government restrictions being placed on Middle Eastern orders for high-end AI chips, in an attempt to thwart China potentially intercepting them. There is currently a bottleneck of regional customers ordering chips and other technologies from Nvidia, Advanced Micro Devices (AMD), and Intel, as well as the US hyperscalers. Ooredoo’s deal with Nvidia can be interpreted in one of three ways:
1. The policy has been unofficially relaxed to mitigate increasing Chinese tech encroaching into MENA, as evidenced by Huawei’s recent deployment of a cloud region in Egypt – the first global tech firm to do so in North Africa.
2. The GPUs purchased by Ooredoo have been downgraded and categorized as mid-range technologies that fall outside the high-end, to which stringent US restrictions apply.
3. The geographical restriction of technologies like AI manufactured by the likes of Nvidia is not sustainable in the long term. So, vendors are testing the limits of strict criteria of US export controls.
To assuage any fears, Ooredoo added that the three Middle Eastern countries where it operates – Qatar, Kuwait, and Oman – host US military bases and large US corporations, which can, in turn, be consumers of these technologies. It is possible that all three reasons are true to some extent. Other Middle Eastern AI vendors, like the UAE’s G42, are phasing out Chinese hardware, which has enabled G42 to secure a $1.5 billion AI deal with Microsoft in April 2024.
Whatever the case, it is clear that MENA is heating up as a tech battleground between China and the US. The telecoms operators in MENA, and by extension local and regional businesses, will profit from this dynamic.