The United Arab Emirates is rapidly emerging as the regional powerhouse for AI, cloud computing, and data sovereignty, thanks to an unprecedented wave of datacentre and hyperscale investments that are reshaping the nation’s digital landscape.
According to Research and Markets, the UAE’s datacentre market, valued at $1.26 billion in 2024, is projected to exceed $3.3 billion by 2030. The expansion is driven by government-led digital transformation, aggressive AI adoption, and a pro-innovation regulatory environment that continues to attract global tech leaders.
Building the Infrastructure for a Digital Nation
Government initiatives—combined with private and sovereign investments—are propelling the UAE toward data self-sufficiency. Executives told the Emirates News Agency (WAM) that the country’s growing cloud infrastructure ensures national data control, enabling organizations to operate securely within UAE borders.
Fahad Al Hassawi, CEO of Du, highlighted that the telecom operator invested AED 545 million in digital infrastructure in 2025, up from AED 442 million in 2024, emphasizing its role in fortifying national 5G and cloud capabilities. “We continue to invest heavily to reinforce data sovereignty and support the digital economy,” Al Hassawi said.
Global Tech Giants Deepen UAE Presence
The UAE’s open economy and regulatory clarity have made it a magnet for hyperscalers. Alibaba Cloud launched its second Dubai datacentre to anchor its Middle East operations, while Cloudera Group Vice President Ahmad Shakoura stressed that “AI cannot thrive without robust data infrastructure,” citing hybrid cloud models as essential for scalable and secure AI development.
Local leader Khazna Data Centers is spearheading the domestic expansion, targeting over 1GW of hyperscale capacity by 2030, with 400MW of new facilities planned in Saudi Arabia, Italy, and the UAE. “The UAE’s growth in AI comes from leadership’s commitment to building intelligence locally to fuel economic development,” said Tinboat Arslanouk, Chief Business Officer at Khazna.
The Middle East as the Next Digital Backbone
As the region’s digital economy accelerates, analysts predict the UAE will play a central role in the global data network. “Aggressive investments, progressive legislation, and strategic ambition are transforming the Middle East into a critical part of the global digital backbone,” Arslanouk added.
Corporate CIOs share that sentiment. Umesh Moolchandani, CIO of Bin Dasmal Group, emphasized the value of hybrid, multi-cloud architecture. “For sensitive, mission-critical workloads, a blend of private datacentres and hyperscale capabilities ensures better latency, data sovereignty, and cost predictability,” he said.
Future-Proofing the UAE’s Digital Economy
The UAE’s datacentre boom represents more than infrastructure—it’s the foundation for AI leadership, cybersecurity resilience, and regional digital autonomy. With continued investments from both local champions and global innovators, the UAE is positioning itself not only as a digital hub for the Middle East, but also as a global benchmark for AI-driven economic transformation.
