IBM: Saudi AI Sovereignty No Longer Just About Data Location

Saudi digital sovereignty is no longer only about where data is stored, but about control over infrastructure, models and operations. Shutterstock
Saudi digital sovereignty is no longer only about where data is stored, but about control over infrastructure, models and operations. Shutterstock
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IBM: Saudi AI Sovereignty No Longer Just About Data Location

Saudi digital sovereignty is no longer only about where data is stored, but about control over infrastructure, models and operations. Shutterstock
Saudi digital sovereignty is no longer only about where data is stored, but about control over infrastructure, models and operations. Shutterstock

Digital sovereignty in Saudi Arabia is no longer just about where data is stored. It is now about who controls the infrastructure, models, operations, keys, and digital supply chains when conditions change.

That question dominated an IBM roundtable on digital sovereignty in the Kingdom, as Saudi Arabia accelerates the digital agenda of Vision 2030 and raises its ambitions in artificial intelligence, cloud infrastructure, operational resilience, and governance.

A gap between awareness and readiness

IBM says Saudi market findings show that 90% of Saudi executives believe AI sovereignty should be part of their business strategy in 2026. But the discussion pointed to a much lower level of actual readiness, with participants saying only “two to three out of every 10” clients in the Kingdom are adequately prepared.

Ayman AlRashed, IBM’s regional vice president in Saudi Arabia, said the debate is no longer theoretical or something to postpone. It is “a discussion happening today,” he said.

The gap, he said, is not about awareness. It is about the distance between believing sovereignty belongs in strategy and having the ability to execute it. Many organizations, he added, still approach sovereignty in traditional terms, asking “where is the data?” and “where is the computing?” even as the issue has become far wider.

Ayman AlRashed, IBM’s regional vice president in Saudi Arabia (IBM)

A Saudi study by the IBM Institute for Business Value found that 63% of Saudi leaders are concerned about reliance on specific regions for computing resources, above the global average. Another 85% believe geopolitical and economic issues threaten technology investments.

At the same time, 73% of Saudi leaders believe that geopolitical volatility could create new business opportunities in 2026 if organizations adapt.

Sovereignty is not just location

During the session, attended by Asharq Al-Awsat, Sabine Holl, IBM’s vice president of technical sales and chief technology officer for the Middle East and Africa, said sovereignty has moved from a regulatory demand to a strategic priority.

Holl said the debate began with data sovereignty, whether data was located inside or outside the country. But recent events, including data center outages and geopolitical tensions, have shown that location alone does not guarantee control.

Digital sovereignty, she said, is now tied to control over data, infrastructure and technology development.

IBM divides the concept into four pillars: operational sovereignty, data sovereignty, technology sovereignty and AI sovereignty. In that sense, sovereignty is no longer merely compliance with local data-residency rules. It is the continuing ability to know who can access systems, who manages the environment, where models run and how an organization can prove compliance when needed.

Holl put it plainly: Sovereignty is not just about location.

The question, she said, is not only whether data is stored in a local data center. It is who can control it, under which identity it can be decrypted and whether the organization has a recovery and operating plan if a regional outage or sudden crisis hits.

IBM says Saudi market findings show that 90% of Saudi executives believe AI sovereignty should be part of their business strategy in 2026. Shutterstock

AI complicates the equation

AI makes the issue harder. Models and agents do not simply store or read data. They can access multiple sources, interpret information, suggest decisions or take action inside an organization’s systems.

That changes the sovereignty question. Does an organization control only where its data sits, or does it also control what AI does with that data?

That explains IBM’s focus on what it calls a new operating model for AI. The company says organizations advancing in AI are not merely deploying more tools. They are redesigning how they work. IBM says the model rests on four connected systems: agents, data, automation and hybrid.

In this context, IBM announced the next generation of Watsonx Orchestrate to coordinate and manage AI agents across different environments, along with capabilities linked to real-time data through Confluent, watsonx.data, IBM Concert for intelligent operations and IBM Sovereign Core for operational sovereignty.

During the session, Asharq Al-Awsat asked whether sovereignty becomes harder when agents enter enterprise workflows, because data is no longer only stored, but also used, interpreted and acted upon.

Holl said organizations now face a reality in which agents are spreading “everywhere,” inside their own environments and on other platforms, making “supervision” and auditability essential. She said part of IBM’s operating model includes what she described as an “agent control layer” to manage and monitor those agents.

From cloud to operational sovereignty

IBM sees a hybrid cloud strategy as central to building sovereignty.

Holl said cloud changed how sovereignty is viewed, especially in the Middle East and Africa, where laws and requirements on data access and use emerged early. That helped shape IBM’s hybrid cloud strategy, she said, so that the benefits of cloud are not limited to public environments, but can also apply to private clouds and on-premises systems.

The “promise of cloud,” built on the idea that everything would move to the cloud, has not fully materialized, Holl said. Many organizations still operate across hybrid and multi-cloud environments without sufficient transparency or clear audit and control capabilities.

If an organization cannot answer “at the push of a button” where systems are running, who controls them and whether they comply with requirements, then it is not truly sovereign, she said.

IBM calls this “sovereignty by design.”

Holl said an existing environment cannot simply be patched later to become sovereign. She compared it to a small boat on a lake, saying it cannot simply be repaired into a ship capable of crossing an ocean and facing a storm.

In practice, that means sovereignty must be built into the architecture from the start, through portability, choice, open platforms, recovery plans and control over keys and identities.

IBM says human skills are the currency of the AI economy. Shutterstock

Turning sovereignty into operations

IBM says IBM Sovereign Core is designed to operationalize and verify digital sovereignty, rather than just a written policy.

The company describes it as a platform that helps governments, organizations and service providers build AI-ready sovereign environments, with the ability to prove control and compliance across hybrid settings.

Dinesh Nirmal, senior vice president, products, software at IBM, said AI has made sovereignty “a runtime requirement, not a policy statement.”

AlRashed said that as AI becomes part of institutional and national strategies, organizations need to innovate “without compromising operational authority, trust or regulatory requirements.”

The platform includes a customer-managed control layer, identity services, encryption, data within sovereign boundaries, continuous compliance monitoring, automated audit evidence, prebuilt regulatory frameworks and controlled deployment of AI models, inference and agents within defined sovereign limits.

It also relies on open technologies, including Red Hat OpenShift and Red Hat AI, and supports a partner ecosystem that includes AMD, Dell, Mistral, MongoDB and Palo Alto Networks.

Holl said the point is not that every organization must build a local server or chip. It is that organizations must be able to choose and move between components and environments when conditions change.

Shortages of graphics processing units, memory and chips could become a sovereignty risk, she said, if an organization is locked into one supplier or an architecture it cannot replace.

Resilience is part of sovereignty

A key theme in the discussion was that sovereignty cannot be separated from operational resilience. An organization that cannot recover from an outage, cyberattack or geopolitical crisis does not, in practice, have the control it believes it has.

Holl said some backup and disaster recovery strategies failed because they were not seriously tested or treated as an operational necessity rather than a useful option.

In Saudi Arabia, the issue is gaining weight as digital transformation expands across sensitive sectors, including government, energy, finance, telecommunications and health care.

Participants said some entities, especially government bodies, are no longer just waiting for policies to be completed. They are moving practically to shift workloads to sovereign providers, or to ensure that those managing environments are located inside the Kingdom.

Sovereignty and human skills

The discussion was not limited to technology. AlRashed linked digital sovereignty to people, saying AI cannot deliver value without skills and trust in systems.

“Human skills are the currency of the AI economy,” he said. Some organizations, he added, deploy AI but fail to achieve the expected value because users lack the confidence or ability to benefit from it.

That adds another layer to the Saudi debate. Sovereignty is not only about who owns the data center or cloud platform. It is also about who operates it, who understands the risks, who can prove compliance and who can change course when rules, markets or threats shift.

In IBM’s 2026 trends report, 88% of Saudi executives said agentic AI helps them make better, faster decisions during disruption.

But that optimism creates a parallel challenge. The more agents can support decisions or carry out tasks, the greater the need for clear governance, auditing, lifecycle management for models and agents and the ability to stop or adjust what is not working as required.

A Saudi model taking shape

Saudi Arabia appears to occupy a distinct place in this debate. Holl described it as an example of a market building local data centers and working with global cloud providers to bring technology into the country, allowing innovation within local regulatory frameworks.

At the same time, the figures show that concern about external dependence on computing, chips and global providers is greater than the global average.

The debate, then, is not about choosing between full isolation and full openness. It is about building a model that balances access to global innovation with local control, the ability to prove compliance and the operation of AI within clear boundaries.

In this context, digital sovereignty becomes part of the operating architecture of the digital economy, not just a legal clause or regulatory requirement.

As AI moves from pilots to operations, and from models to agents, the question raised by the session becomes more urgent for Saudi organizations: Do they merely have data inside their borders, or do they have full control over what happens to that data, who uses it, how models and agents operate on it and what happens when conditions change?



China's DeepSeek to Raise Fresh Capital at $74 Billion Valuation Ahead of Onshore IPO

FILE PHOTO: A DeepSeek AI sign is seen at a building where the Chinese start-up's office is located in Beijing, China, February 19, 2025. REUTERS/Florence Lo/File Photo
FILE PHOTO: A DeepSeek AI sign is seen at a building where the Chinese start-up's office is located in Beijing, China, February 19, 2025. REUTERS/Florence Lo/File Photo
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China's DeepSeek to Raise Fresh Capital at $74 Billion Valuation Ahead of Onshore IPO

FILE PHOTO: A DeepSeek AI sign is seen at a building where the Chinese start-up's office is located in Beijing, China, February 19, 2025. REUTERS/Florence Lo/File Photo
FILE PHOTO: A DeepSeek AI sign is seen at a building where the Chinese start-up's office is located in Beijing, China, February 19, 2025. REUTERS/Florence Lo/File Photo

Chinese AI startup DeepSeek is planning to launch a fresh fundraising round at a valuation of about 500 billion yuan ($74 billion) ahead of a potential mainland initial public offering, two people with knowledge of the matter said.

The plan comes just weeks after the Hangzhou-based company, which drew global attention with its low-cost AI models in 2025, raised about $7.4 billion in June a post-money valuation of about 450 billion yuan, the people said.

The back-to-back fundraising plans underscore strong investor appetite for one of China's most closely watched AI companies, but also point to the rising costs of competing in AI, which requires large amounts of computing power, data-center capacity and engineering talent.

DeepSeek is looking to raise as much as 50 billion yuan in the new funding round, according to a third person briefed on the ⁠matter.

It has also started ⁠early deliberations on a potential IPO on Shanghai's Nasdaq-style STAR Market, the three sources and two other people with knowledge of the plan said.

The company has set an internal target to complete an IPO filing this year, one of them told Reuters.

All the people declined to be identified because the information is not public. The fundraising and IPO plans are at early stages and terms and timetable may change, they said.

DeepSeek did not immediately respond to a request for comment.

Bloomberg News first reported on Tuesday ⁠that DeepSeek was preparing for a possible IPO filing, while the Financial Times reported that the company was weighing a fresh fundraising round at a valuation of at least 480 billion yuan.

DeepSeek shook global technology markets last year after releasing models that appeared to rival leading US systems at lower training and operating costs.

Soon after its maiden fundraising round in June, DeepSeek said it planned to double staff across departments, including in areas such as data centers and AI agents, systems capable of performing tasks with limited prompting.

Some of those initiatives will require significant capital expenditure. Reuters reported earlier this month that DeepSeek was looking to develop its own AI inference chip and had discreetly increased hiring of chip-design engineers for the project.

DeepSeek had long stood out in China's AI sector for rejecting outside ⁠funding. Founder Liang Wenfeng ⁠had largely bankrolled the company using his quantitative hedge fund High-Flyer before its recent external financing, sources previously told Reuters.

But the cost of staying at the frontier of AI has risen sharply, forcing a change in strategy.

DeepSeek has in the past year faced stiff competition at home from tech giants including ByteDance and Alibaba, as well as well-funded AI startups such as Z.ai, Moonshot, and MiniMax.

In the June funding round, DeepSeek founder Liang personally committed 20 billion yuan, while Tencent Holdings and battery giant CATL chipped in 10 billion yuan and 5 billion yuan respectively to become the largest external shareholders, Reuters reported at the time.

Other investors include China's national AI fund, gaming developer NetEase and e-commerce giant JD.com , as well as investment firms IDG Capital, Loyal Valley Capital, Monolith Management and Shixiang Capital, according to sources and media reports.

The participation of the state-backed AI fund highlighted DeepSeek's strategic importance to Beijing's efforts to build domestic AI champions and reduce reliance on foreign technology.


Generative AI’s Power Sparks Fears of Dumbing Humans Down

An AI sign is seen at the World Artificial Intelligence Conference in Shanghai, China July 6, 2023. (Reuters)
An AI sign is seen at the World Artificial Intelligence Conference in Shanghai, China July 6, 2023. (Reuters)
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Generative AI’s Power Sparks Fears of Dumbing Humans Down

An AI sign is seen at the World Artificial Intelligence Conference in Shanghai, China July 6, 2023. (Reuters)
An AI sign is seen at the World Artificial Intelligence Conference in Shanghai, China July 6, 2023. (Reuters)

Generative AI chatbots capable of writing emails and computer code, translating, organizing a trip or coming up with gift ideas are now readily available, prompting some to ask whether human brainpower could suffer for lack of use.

A simple natural-language prompt is usually enough to draw a useable response from a service like ChatGPT or Claude, with the effects making themselves felt in schools and universities, workplaces from offices to courtrooms and our personal lives.

Recent scientific studies suggest there could be harmful consequences to farming out cognitive tasks to AI.

They highlight memory, decision-making and critical thinking as particularly at risk.

One American-British study of 1,222 people, still under peer review, found that using AI tools to solve arithmetic or reading comprehension exercises improved participants' performance in the short term, but in the long run diminished their results and their willingness to keep trying when the tools were unavailable.

"These findings are particularly concerning because persistence is foundational to skill acquisition and is one of the strongest predictors of long-term learning," the authors wrote.

AI's ability to conjure up speedy responses to all kinds of questions "removes learning opportunities" from users, said Carnegie Mellon University doctoral student Grace Liu, the article's main author.

"What makes AI particularly concerning is that it's not a tool designated for one specific kind of activity. It's something that can be used across pretty much any intellectual, reasoning, and cognitive activity."

The technology's adaptability to different kinds of problems sets it apart from previous waves of computerized aids.

Electronic calculators, for instance, may have helped users solve equations, but left the method and reasoning process in human hands.

- Saving energy -

One 2025 MIT study went viral for its finding that students using generative AI to write essays displayed less critical thinking capability.

Other research has pointed the same way, highlighting what has come to be called "cognitive offloading" -- or even "cognitive surrender".

"Human beings have a strong tendency to save energy," said Johann Chevalere, a researcher in social and cognitive psychology at France's publicly-funded CNRS institution.

"In daily life, we often use strategies that get us to the heart of the matter quicker, without necessarily taking the time to study in depth the information we need to process, as this can be cognitively costly," he added.

Generative AI use could strengthen this tendency, Chevalere said.

"If there are activities you never do, the brain -- which works by saving energy -- won't go to the trouble of maintaining connections that aren't being used."

- Encouraging reflection -

Under pressure from critics, generative AI developers have begun building so-called "Socratic" functions into their models, which for now remain mostly aimed at students.

In this mode, chatbots do not simply provide the answer, instead offering hints and asking questions to stimulate users' thinking.

Examples include the "study mode" built into OpenAI's ChatGPT, or "guided learning" in Google's Gemini.

US software giant Microsoft told AFP it had built warnings about the risk of mistakes into its Copilot models.

The AI also reminds users to check the information it provides, just one of several measures designed to keep them actively and critically engaged with its responses.

"The risk of excessive cognitive offloading is real, especially if AI is used to automate tasks that are also valuable for developing skills," Microsoft said, adding that users have to be trained to use the tools correctly.

For now, there is a lack of large-scale, long-term studies to judge the true impact of the new technology on human brains, researchers agreed.

Until they are available, "it's up to us to use AI in a smart way," Chevalere said.

"We'll adapt to this technological revolution just as we have to the previous ones."


Meta Employees Allege Discriminatory AI-driven Layoffs

FILE PHOTO: The logo of Meta at the Meta Lab in Los Angeles, California, US, May 20, 2026. REUTERS/Daniel Cole/File Photo
FILE PHOTO: The logo of Meta at the Meta Lab in Los Angeles, California, US, May 20, 2026. REUTERS/Daniel Cole/File Photo
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Meta Employees Allege Discriminatory AI-driven Layoffs

FILE PHOTO: The logo of Meta at the Meta Lab in Los Angeles, California, US, May 20, 2026. REUTERS/Daniel Cole/File Photo
FILE PHOTO: The logo of Meta at the Meta Lab in Los Angeles, California, US, May 20, 2026. REUTERS/Daniel Cole/File Photo

Twenty-six Meta employees have filed a lawsuit accusing the tech giant of using artificial intelligence to select workers for mass layoffs, a claim strongly denied by the trillion dollar company.

They are among the 8,000 employees -- some 10 percent of the workforce -- Meta said it would lay off in Spring, as it pushes to redirect resources toward an ambitious AI agenda.

According to the lawsuit, filed in Oakland, California on Monday Meta used AI systems to "score, rank, and select employees" to be laid off rather than "the considered judgement of managers who knew the work" while disproportionately targeting those on medical or family leave.

The AI systems relied on "performance ratings, calibration scores, productivity and output metrics" -- markers that cannot be accumulated by an employee on medical or family leave and may be reduced for people with disabilities.

Meta "did not pause the system for the individualized, leave- and accommodation-neutral review that the law requires," AFP quoted the 71-page complaint as saying.

All 26 employees took or requested protected leave, or requested or received a reasonable accommodation for disability, it noted.

"Workforce management and organizational decisions were and are made by people, not AI," a Meta spokesperson was quoted saying by multiple US outlets including CNBC and the Verge.

A Meta spokesperson told CNBC in an email that the "claims lack merit and are not based on facts."

Meta did not immediately respond to AFP's request for comment.

Meta's cuts are funding a massive race for infrastructure, with the company planning to spend up to $145 billion on AI investments this year, nearly twice last year's figure.