Why build AI data center in cornfield, Saudi Arabia has cheap oil, cheaper power (fortune.com)

Meta's stock surged over 7% following reports that the company plans to establish a new business selling excess AI computing capacity to external customers, positioning itself to compete with giants like AWS, Microsoft Azure, and Google Cloud. However, industry analysts like Mark Douglas believe the real story lies in the economic landscape of AI infrastructure. He argues that building data centers in the U.S. is becoming increasingly unattractive due to high costs and community opposition, while Saudi Arabia is emerging as a formidable competitor by leveraging its low energy costs from oil to power massive data centers, potentially reshaping the global AI infrastructure market. Douglas also expressed skepticism regarding Meta's cloud ambitions, suggesting that the move seems disconnected from its core business of social media. He noted that the competition in cloud computing is fierce and that only a limited number of companies can effectively utilize raw data center space. While Douglas is optimistic about Meta's broader AI strategy—particularly with its open-source models and advertising potential—he views the plan to enter the cloud market as a tactical detour rather than a significant strategic shift. Ultimately, the ability of Meta to adapt and succeed in this space remains uncertain, given the complexities of transitioning from a consumer-focused platform to a hyper-competitive infrastructure provider.