A significant development in this trajectory is the partnership between Dubai's Emirates Integrated Telecommunications Company, known as du, and Microsoft. Announced during Dubai AI Week, the collaboration involves the construction of a hyperscale data centre valued at 2 billion dirhams . This facility, owned and operated by du with Microsoft as the primary tenant, will be developed in phases, enhancing the UAE's digital infrastructure and reinforcing its ambition to become a global AI hub.
Khazna Data Centers, the UAE's largest hyperscale wholesale data centre provider, is also making strides. The company has commenced construction of a 100MW AI-optimised data centre in Ajman, marking the region's first facility of its kind. Spanning 100,000 square metres and featuring 20 data halls, each with a 5MW capacity, the centre is designed to meet the high computing power and scalability requirements of AI applications. The project is expected to be operational by the third quarter of 2025.
Despite these advancements, the UAE faces challenges in meeting the surging demand for AI-related data processing and storage. Industry experts highlight a capacity crunch, with existing infrastructure struggling to keep pace. Quentin Reyes, CEO of Hyperfusion, an IT system data services company in Dubai, identifies infrastructure as one of the "biggest bottlenecks" for AI in the region. The Middle East data centre market is projected to grow from $5.6 billion in 2023 to $9.6 billion by 2029, underscoring the urgency for continued investment.
To address these challenges, the UAE is exploring international collaborations. A notable example is the agreement between France and the UAE to develop a 1-gigawatt AI-focused data centre, with investments ranging between $30 billion and $50 billion. This initiative aims to strengthen both nations' positions in the AI industry and foster joint projects in advanced AI technology, data centre infrastructure, and talent development.
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