Executive Summary
Since 2018, major US and Chinese tech companies have increasingly invested in data
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centers in the GCC states, whose financial incentives have made them a regional
digital hub. However, the collaboration between corporations that lack transparency
about data processing and security measures, and states that restrict freedom of
expression, dissent, and media access, raises serious human rights concerns.
This report based on SMEX’s research titled Mapping Tech Companies’ Cloud
Expansion in the Gulf and its Human Rights Implications, introduces how data
centers work and maps the factors driving the investments of nine US and Chinese
tech companies in the Gulf. Finally, the report highlights the human rights risks
associated with constructing data centers in the Gulf, including inadequate data
protection laws, oppressive state practices, and the lack of transparency around
business activities. The report concludes with recommendations addressed to
companies, civil society, and the US Congress.
Research Overview
Given that publicly available sources were limited, the research process was primarily
based on a literature review of announcements published on companies’ and
governments’ websites and news sources covering investments in data center
projects. This phase of quantitatively mapping data centers by foreign tech
companies in the Gulf lasted eight months. The nine tech companies (Amazon,
Equinix, IBM, Google, Microsoft, Oracle, Alibaba, Huawei, and Tencent) were selected
due to their current or planned investments in six GCC states. The companies’ public
commitment to support GCC governments in implementing their national visions
and ambitions of digital transformation, together with the governments’ poor data
protection legal framework and severe repression of civil liberties, is concerning for
the protection of human rights in the region, not only in the Gulf but the WANA in
general.
Discussion/Analysis
A data center is a physical facility comprising servers, networked computers, storage
systems, and computing infrastructure. It serves as fundamental infrastructure in
the broader digital ecosystem and is integral to the functioning of the internet and
digital economies at large.
Data localization (keeping data within the region/country it originated from)
and data sovereignty (subjecting data to its hosting country's laws and governance
structure) are two important factors when deciding where to build a new data
center. By applying these two principles, we find that the nine companies’ current
and future investments in constructing data centers in the Gulf could enable host
governments to have unobstructed access and legal control over a massive amount
of data in the Gulf and the WANA region at large. For companies, their expansion
towards states that aim to establish their position in the digital sphere by becoming
a hub for the digital economy is perceived as a chance for high economic profits.
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The Gulf Cooperation Council is a regional political and economic institution
comprising Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman.