Nvidia Partner Ooredoo Eyes Data Center Acquisitions Amid AI Push, CEO Says
Ooredoo secured an agreement with Nvidia to deploy the latest-generation graphics processing units in its 26 data centers across Qatar, Kuwait, Oman, Tunisia and the Maldives
Qatari telecom group Ooredoo is on a hunt to acquire data centers because it can’t build them fast enough to house Nvidia’s NVDA -0.05%decrease; red down pointing triangle latest-generation of artificial-intelligence chips, its chief executive said.
Ooredoo, majority-owned by the Qatari sovereign wealth fund, in June secured an agreement with Nvidia to deploy the AI chip maker’s latest-generation graphics processing units in its 26 data centers across Qatar, Kuwait, Oman, Tunisia and the Maldives.
The deal gives Nvidia access to markets stretching from North Africa to South Asia. For Ooredoo, the agreement means it can deploy Nvidia chips to cash in on robust demand for accelerated computing infrastructure needed to support generative AI.
But the company now faces a shortage of data centers to house those chips and is betting on acquisitions to help it address surging demand for processing power in the countries where it operates.
“As demand grows, we can’t build data centers fast enough,” Ooredoo’s Chief Executive Aziz Aluthman Fakhroo said in an interview.
“When you look at the latest-generation chips, you can’t just plug them in traditional data centers,” he said. “They need specifically designed data centers with liquid cooling, and this will take 18 months to build out.”
Ooredoo in September secured about $550 million in financing from banks to expand its data-center capacity in the Middle East and North Africa. Gulf countries are heavily investing in AI, looking to become key players in an industry where they can leverage lower energy costs to operate data centers.
But Fakhroo cautioned that building the latest generation of AI data centers at scale can be costly. “You’re usually looking at $10 million to $12 million of investment per megawatt,” he said.
The chief executive said Ooredoo would mostly seek to ramp up its data-center capacity through acquisitions in its existing markets, ruling out expansion in Europe. The decision underscores efforts from the company to diversify its portfolio beyond core telecom services as it jockeys for position as an AI and infrastructure player, Fakhroo said.
“We believe telecom services will continue, but one way to de-risking the business is in investing in the infrastructure stack,” he said.
Ooredoo hopes to capitalize on growing demand from the government and companies in oil and gas, banking, transportation and logistics that require high-performance computing and AI applications. The region currently has limited data centers designed for the high-power density and advanced cooling systems needed to house the latest-generation AI chips.
Fakhroo said the company is aiming to sell the first graphics processing units as a service in Qatar by the first quarter of next year. “We’re looking to very quickly dispatch these chips to Kuwait and Oman after Qatar in the months to come,” he added.
Nishit Lakhotia, analyst at SICO Bank, said Ooredoo could be the most aggressive telecom player with its data-center plans in the region. “You’ve not seen any other company in the industry within the region as black and white with this strategy,” he said.
While its AI data center expansion is drawing most attention from investors, Ooredoo is also seeking to streamline the business, weighing the option to carve out its fiber unit. “We carved out the towers business, then data centers, mobile financial services and in the future potentially fiber,” Fakhroo said.
However, the company said it wasn’t planning to sell its tower business, in which it retains a 49% stake. “We believe there’s lots of value in the tower business,” he said.