Data center developer Quantum Switch Tamasuk (QST) is weighing options for its Saudi business, including a sale, according to Reuters.

Sources familiar with the issue told the news agency that QST has appointed Rothschild to advise on any potential transaction.

One of the sources told Reuters that a potential deal could value the company at more than $500 million.

Rothschild declined to comment.

Discussions are still in the early phases, and QST has yet to determine whether it will explore a sale or consider alternative options, the sources added.

Saudi Arabia is QST’s “most active current location” in the Gulf region, according to the company’s website.

In 2022, the firm signed a deal with the Saudi government to develop 300MW of data center capacity over five years to attract hyperscalers to the country and host public sector data.

Its two data centers in Dammam, a major industrial port city in the Easter Province of the kingdom, have a total capacity of 9MW each.

DMM A and DMM B have a maximum power capacity expansion of 18MW and 6MW, respectively.

The sources that spoke to Reuters said that international private equity firms active in the region have expressed interest in the assets that could be put up for sale.

If the transaction goes ahead, it could draw fresh attention from private equity firms worldwide eager to tap into the Gulf’s burgeoning AI market.

In January, Ooredoo’s data center subsidiary, Syntys, acquired two facilities in Qatar leased to Quantum Switch.

Syntys (formerly Mena Digital Hub) was created last year when Ooredoo spun off its MENA data center operations. Iron Mountain has invested in the business.

According to S&P Global, the megawatt load for data centers in Saudi Arabia will expand by an estimated 29 percent each year until 2030.

This has been largely driven by the kingdom’s ‘Vision 2030’ initiative, which seeks to speed up digital transformation as the country diversifies its economy away from oil production.

Several new developments have already been spearheaded by its Hub for Manufacturing AI in Neom (Humain), including a new 500MW facility to be built in partnership with Elon Musk’s xAI venture and the creation of 1GW of capacity with the Saudi Telecom Company.

QST didn’t respond to DCD’s request for comment.

Learn more about the data center market in Saudi Arabia and meet with other executives and experts in the region at the DCN Riyadh event next year.