When I first learned that there were AWS Middle East regions, my first thought was "wow they are more optimistic than I am ."

Google Cloud also has middle east locations. As does Azure, Oracle and Alibaba. Afaik, IBM Cloud does not. I think those five and AWS are the top 6 global public access clouds.

No, they are more aware of the customer demand for compute in the region.

And demand for data sovereignty.

Absolutely, especially in the KSA.