Chinese technology giant Tencent is making big moves to expand its cloud computing footprint in the Middle East, a region that has become a fast-growing market for digital infrastructure.
The company is aiming to capitalize on rising demand for cloud services and artificial intelligence as governments and businesses across the region increase technology spending.
Tencent plans to increase the number of cloud “availability zones” it operates over the next 12 to 18 months across Asia-Pacific, Europe, and the Middle East, according to Dowson Tong, chief executive of Tencent’s cloud group. Availability zones are locations designed to host clusters of data centers, helping cloud providers deliver more resilient, lower-latency services.
It is “actively exploring building data centers” in the Middle East to support cloud services, Dowson Tong told CNBC. He added that Tencent intends to increase investment and strengthen partnerships in the region, but declined to specify timelines or which countries could host future facilities.
Middle East emerges as cloud and AI hub
The expansion plans come as the Middle East attracts growing interest and large-scale investment from global technology firms. Governments across the Gulf are making cloud computing and AI central to economic diversification strategies, and the region has become a target for data center projects and advanced computing infrastructure.
That momentum has already attracted the attention of US tech giants. Last year, Nvidia and OpenAI announced plans to help build a major AI infrastructure project in the United Arab Emirates under the Stargate initiative.
Industry forecasts indicate continued growth. Gartner estimates that information technology spending in the Middle East and North Africa will total $155 billion in 2025, up nearly 9% year-on-year and above the global average growth rate. Cloud services and AI-related infrastructure are expected to account for much of that increase as enterprises modernize their IT systems.
Early presence in Saudi Arabia
Tencent is already ahead of the game, operating an availability zone in Saudi Arabia that gives it an early presence in the region. The company also provides cloud services to gaming companies operating in the Middle East, leveraging its deep expertise as one of the world’s largest video game publishers.
That early foothold could make it easier for Tencent to expand further, particularly among Chinese companies moving into the Middle East that may prefer to work with a familiar cloud provider, and alongside regional customers as demand for localized cloud infrastructure grows.
Competition with US cloud players
Further expansion would bring Tencent into closer competition with US cloud leaders such as Amazon Web Services, Microsoft Azure, and Google Cloud, all of which have invested heavily in data center capacity in the Middle East. While Tencent may be smaller than its rivals globally, the company is betting that following its customers overseas can help it grow.
The company’s large domestic client base also offers an advantage. Firms already using Tencent Cloud in China may choose to use the same platform as they expand internationally, giving Tencent a foothold in new markets.
Of course, Tencent isn’t the only firm with its sights set on this region, as the Middle East has become an increasingly important destination for Chinese technology firms pursuing international growth. Lenovo, the world’s largest PC maker, has set up its regional headquarters in Saudi Arabia and is building a manufacturing facility there. Lenovo executives have cited strong government support and heavy investment as key reasons for expanding in the region.
Cloud expansion supports AI strategy
Cloud computing plays a central role in Tencent’s broader AI strategy. While gaming remains the company’s primary revenue source, Tencent has been investing heavily in AI and enterprise technology. Expanding cloud infrastructure overseas allows the company to support data-intensive applications and meet local data residency requirements.
Global recognition of China’s AI ecosystem has been growing as well. Nvidia CEO Jensen Huang has praised Chinese AI models from companies including Tencent as among the world’s most advanced, citing their open-source development as a driver of innovation.
A strategic bet on the area
Expanding cloud operations in the Middle East offers the company a strategic opportunity to diversify its revenue and strengthen its international presence. While competition from established US providers is fierce, the scale of regional investment and rapid adoption of cloud technologies make the Middle East a key element in Tencent’s global cloud strategy.
Also read: Microsoft’s $15 billion investment in the UAE highlights the region’s growing push into AI and cloud infrastructure.
