The UAE is undergoing a shift in its digital infrastructure landscape, with a wave of data centre and cloud investments reshaping the nation into a regional hub for artificial intelligence (AI) and digital transformation.
This momentum is not only redefining the UAE’s technological capabilities but also reinforcing its strategic vision of becoming a global nexus for digital innovation and data sovereignty.
According to a recent report by Research and Markets, the UAE’s datacentre market was valued at approximately $1.26bn in 2024 and is projected to surpass $3.3bn by 2030. This growth is underpinned by a robust pipeline of operational and upcoming facilities, with combined capacities reaching several hundred megawatts.
The investment surge is being driven by a confluence of factors – the UAE government’s digital transformation agenda; the rapid adoption of AI technologies across sectors; and a regulatory environment that encourages innovation and foreign investment. Sovereign wealth funds, regional developers, and global hyperscalers are all doubling down on the UAE’s digital future.
Executives from leading UAE and international firms told the Emirates News Agency (WAM) that the country’s cloud infrastructure is enabling true data sovereignty, allowing organisations to manage and operate their data and AI solutions securely within national borders.
Fahad Al Hassawi, CEO of Du, highlighted the telecom operator’s commitment to bolstering national digital infrastructure: “We continue to invest heavily in datacentres and 5G networks to support the digital economy and reinforce data sovereignty,” he told WAM.
Du’s capital investments in digital infrastructure reached AED 545m in 2025, up from AED 442m in 2024, with capital intensity rising to 14%.
Global tech giants bet big on the UAE
The UAE’s appeal as a cloud and AI hub is not lost on international players. Eric Wan, vice president of Alibaba Cloud International, praised the country’s open economic and regulatory environment, calling it “ideal for attracting major investments.” Alibaba Cloud recently launched its second datacentre in Dubai, part of a broader strategy to anchor its Middle East operations in the UAE.
Ahmad Shakoura, group vice president for emerging markets at Cloudera, emphasised the foundational role of cloud infrastructure in enabling AI. He told WAM that AI cannot thrive without advanced data infrastructure, highlighting that hybrid cloud environments are now among the UAE’s most strategic enablers for scalable, secure, and high-performance AI adoption.
Local champions are equally ambitious. Khazna Data Centers, the UAE’s largest datacentre provider, recently announced plans to add over 1GW of hyperscale capacity by 2030. This includes more than 400MW of new capacity in international markets such as Saudi Arabia and Italy, alongside major domestic expansions in Abu Dhabi, Dubai, and Ajman.
“The region’s growth in AI, and specifically in the UAE, comes from the leadership’s commitment to leapfrogging into the future and building intelligence locally to fuel economic development,” said Tinboat Arslanouk, chief business officer – international at Khazna in a recent interview with ComputerWeekly.
As the Middle East’s digital economy accelerates, the UAE is emerging not just as a participant but as a leader. “The Middle East datacentre market is booming due to aggressive investments, advantageous legislation, and strategic ambition,” Arslanouk added. “This region is quickly becoming a crucial component of the global digital backbone.”
Regional IT leaders have also welcomed the growth of the Middle East market. Umesh Moolchandani, CIO at engineering firm Bin Dasmal Group said, “A hybrid, multi-cloud architecture that combines private, locally managed datacentres with hyperscale capabilities is our top priority. For sensitive, mission-critical workloads, this guarantees optimal latency, enhanced data sovereignty, and predictable prices.”
With a blend of visionary leadership, cutting-edge infrastructure, and a welcoming business climate, the UAE is not only future-proofing its economy, it’s hoping to set the pace for digital transformation across the region and beyond.
