The Tencent logo is displayed on the exterior of a building at the company’s headquarters, with a surveillance camera visible in the foreground, on November 30, 2024, in Shenzhen, Guangdong Province, China.
Cheng Xin | Getty Images News | Getty Images
Tencent plans to expand its data center footprint in the Middle East, a top executive at the Chinese tech giant told CNBC, as the company looks to boost its cloud computing business outside China.
Dowson Tong, CEO of Tencent’s cloud group, told CNBC that the company plans to expand the number of “availability zones,” locations designated as sites for potential clusters of data centers, for its cloud services over the next 12 to 18 months, in countries across Asia Pacific, Europe, and the Middle East.
In the Middle East, Tencent is “actively” exploring building data centers there to service cloud customers, Dowson added.
“We do intend to increase our investment in the region and establish a stronger partnership network. And that’s all in the plan,” he said, declining to give more specific timelines or countries where exactly the availability zones might be.
Tencent’s planned expansion in the Middle East comes as countries in the region draw in huge investments from tech giants to build AI data centers and other computing infrastructure.
Last year, Nvidia, OpenAI and others committed to building a massive AI infrastructure project under the Stargate brand in the United Arab Emirates.
In August, analysts at Gartner forecast information technology spending in the Middle East and North Africa region to hit $155 billion in 2025, up nearly 9% year-on-year and above the global growth rate.
Tencent has already opened an availability zone in Saudi Arabia. Further expansion in the Middle East will likely put it into more direct competition with U.S. giants, including Amazon, Microsoft and Google.
Dowson said Tencent already has customers in Saudi Arabia buying its cloud services, such as Keeta, the international food delivery subsidiary of Chinese giant Meituan. Tencent, which is one of the world’s largest gaming companies, has gaming firms in the region also using its Saudi-based cloud services, Dowson added.
While most of Tencent’s revenue still comes from gaming, the company has sought to diversify its business by expanding other areas, including cloud computing.
Tencent is hoping to differentiate itself from U.S. rivals by using its strong customer base in China to expand internationally. For example, customers who use Tencent’s cloud in China may also buy the company’s services abroad.
The Middle East is becoming a key area of expansion for Chinese firms.
Lenovo, the world’s biggest PC company, has set up its regional headquarters in Saudi Arabia and is currently building a manufacturing plant there.
“I think there’s so much initiative and investment going into … the Middle East. So I think we’re very excited about the opportunity there,” Winston Cheng, CFO of Lenovo, told CNBC in an interview last week.