ABU DHABI
25 Jan 2026 – Gulf Today
The UAE continues to consolidate its global leadership in smart city development through large-scale strategic investments, particularly in data centres, which now form the operational backbone of real-time urban management and the digital economy.
As artificial intelligence, the Internet of Things, and digital government services expand rapidly, data has become the core driver of urban life. Data centres have evolved into the infrastructure through which smart cities operate in real time.
Amel Chadli, President of the Gulf Cluster at Schneider Electric, said data centres now function as the “brain” of smart cities, processing vast volumes of information instantaneously—often reaching several terabytes in advanced environments.
She explained that this capability is essential for the UAE, where modern urban systems—ranging from transport and government services to energy and public safety—depend on interconnected digital infrastructure powered by AI and IoT.
Projects such as Masdar City, the Dubai Urban Plan 2040, and the Digital Government Strategy 2025 demonstrate that the UAE is building an urban model based on data-driven decision-making to enhance quality of life. Turning this vision into reality, Chadli noted, requires secure, flexible local digital infrastructure capable of supporting new applications.
She added that the expansion of AI will significantly increase power requirements in data centres, potentially exceeding 20 to 50 kilowatts per server rack. The UAE’s investments in sustainable, high-efficiency facilities therefore represent a foundational step in building future cities.
Kamel Al Tawil, Managing Director for the Middle East and North Africa at Equinix, described data centres as the digital brain of smart cities, enabling real-time processing, analysis, and intelligent decision-making.
He said that rapid response, high capacity, and ultra-connectivity are critical for technologies such as AI, IoT, and smart services. Seamless connectivity and integrated digital ecosystems directly support the UAE’s vision of building connected, sustainable cities ready for future demands.
Al Tawil highlighted the importance of localising data traffic to reduce latency and improve performance, particularly as 83 percent of internet traffic in the Middle East still routes through Europe. Local data centres are essential to meet growing demand for services such as video streaming, cloud computing, online gaming, and e-sports.
Data forms the foundation of every smart city. Urban efficiency depends on the ability to collect information from millions of sensors and IoT devices and analyse it in real time within data centres. Without this capability, smart cities cannot operate as unified systems, leaving digital solutions fragmented and limited in impact.
Economic indicators reflect the scale of this transformation. Research by global institutions, including Research and Markets, projects that the UAE data centre market will exceed US$3.3 billion by 2030.
The UAE already hosts the region’s largest data centre infrastructure and plans to double capacity in the coming years, reinforcing its position as a regional and global hub for data storage and processing, aligned with the nationwide expansion of smart city projects.
The country ranks among the world’s leading investors in smart cities, particularly in AI, IoT, data centres, and advanced telecommunications networks. According to the IMD Smart City Index, Dubai rose to fourth place globally in 2025, while Abu Dhabi ranked fifth.
