The UAE is undergoing changes to its digital infrastructure a situation where a wave of investment in data centers and clouds is transforming the country into a regional hub for artificial intelligence (AI) and digital transformation.
This momentum is not only redefining the UAE's technological capabilities, but also strengthening its strategic vision to become a global nexus for digital innovation and data sovereignty.
According to recent report Research and Markets estimates that the UAE data center market is valued at approximately $1.26 billion in 2024 and is projected to exceed $3.3 billion by 2030. This growth is supported by a robust portfolio of existing and future facilities, with a combined capacity of several hundred megawatts.
The investment surge is driven by a confluence of factors: the UAE government's digital transformation program; rapid adoption of artificial intelligence technologies across all sectors; and a regulatory environment that encourages innovation and foreign investment. Sovereign wealth funds, regional developers and global hyperscalers are redoubling efforts to secure the UAE's digital future.
Heads of leading UAE and international firms spoke The Emirates News Agency (WAM) said the country's cloud infrastructure ensures true data sovereignty.allowing organizations to securely manage and use their data and AI solutions across national borders.
Fahad Al Hassawi, CEO of Du, emphasized the telecom operator's commitment to strengthening the nation's digital infrastructure: “We continue to invest heavily in data centers and 5G networks to support the digital economy and strengthen data sovereignty,” he told WAM.
Du's capital investment in digital infrastructure reached Dh545 million in 2025, up from Dh442 million in 2024, with capital intensity rising to 14%.
Global tech giants are betting big on the UAE
The UAE's attractiveness as a cloud and artificial intelligence hub is not lost on international players. Eric Wang, vice president of Alibaba Cloud International, praised the country's open economic and regulatory environment, calling it “ideal for attracting large-scale investment.” Alibaba Cloud recently launched its second data center in Dubai, part of a broader strategy to consolidate its Middle East operations in the UAE.
Ahmad Shakura, vice president of Cloudera's emerging markets group, emphasized the fundamental role of cloud infrastructure in enabling artificial intelligence capabilities. He told WAM that artificial intelligence cannot thrive without a strong data infrastructure, highlighting that hybrid cloud environments are currently one of the most strategic tools in the UAE for scalable, secure and high-performance implementation of artificial intelligence.
Local champions are equally ambitious. Khazna Data Centers, the largest data center provider in the UAE, recently announced plans to add over 1 GW of hyperscale capacity by 2030.. This includes more than 400 MW of new capacity in international markets such as Saudi Arabia and Italy, as well as significant expansion of domestic capacity in Abu Dhabi, Dubai and Ajman.
“The growth of artificial intelligence in the region, and especially in the UAE, is driven by management’s desire to leapfrog into the future and create local intelligence to drive economic development,” said Tinboat Arslanouk, Khazna’s global chief business officer, in a recent interview with ComputerWeekly.
As the digital economy accelerates in the Middle East, the UAE is not just a participant, but a leader. “The data center market in the Middle East is booming, driven by aggressive investment, favorable legislation and strategic ambition,” added Arslanouk. “The region is quickly becoming a critical component of the global digital backbone.”
Regional IT leaders also welcomed the growth of the Middle East market. Umesh Mulchandani, CIO of engineering company Bin Dasmal Group, said: “Our top priority is a hybrid multi-cloud architecture that combines private, locally managed data centers with hyperscale capabilities. For sensitive, mission-critical workloads, this ensures optimal latency, increased data sovereignty and predictable prices.”
By combining visionary leadership, cutting-edge infrastructure and a favorable business climate, the UAE is not only securing the future of its economy, but also hopes to set the pace for digital transformation across the region and beyond.
