The new firm, which aims to address the demand for cloud computing services and solutions in the region, will have a capital of $238.3m
Stc will have a 55% stake in the cloud computing company in Saudi Arabia. (Credit: Wynn Pointaux from Pixabay)
Saudi Telecom Company (stc) is partnering with China-based Alibaba Group and others to establish a new cloud computing company in the Saudi Arabian capital Riyadh for providing high-capacity cloud services.
In this connection, stc has signed a joint venture (JV) agreement with Alibaba Cloud (Singapore) and domestic firms eWTP Arabia for Technical Innovation, the Saudi Company for Artificial Intelligence (SCAI), and the Saudi Information Technology Company (SITE).
The new cloud computing firm will have a capital of SAR894m ($238.3m). It is being established in the wake of the considerable spike in demand for cloud computing services and solutions in the region.
The formation of the new firm is also said to be in line with the expansion and growth strategy of stc, and Saudi Arabia’s Vision 2030 for a localised hyperscaler cloud computing.
STC, which will have a stake of 55% in the JV, will invest its share of SAR491.7m ($132m) from its own resources.
Alibaba Cloud will have a 10% stake, while SCAI and SITE will have a stake of 4% each.
The remaining 27% stake in the new cloud computing company will be held by eWTPA.
The Saudi Arabian Public Investment Fund (PIF) is a limited partner in eWTPA via its fully-owned subsidiaries. It also owns all the shares of SCAI and SITE.
Besides, PIF is the largest shareholder in stc with a stake of 64%.
In March 2022, stc signed a JV agreement with PIF to set up a company specialising in the field of Internet of Things (IoT) in Saudi Arabia with an initial capital of SAR492m ($131.2m).
In February this year, stc announced an investment of $1bn in its Middle East and North Africa (MENA) hub. The investment will be made in regional connectivity and infrastructure to support the rapidly growing digital and cloud sector of Saudi Arabia.