Middle East datacentre capacity set to triple by 2030

Regional hubs and strategic advantages

The UAE and Saudi Arabia are at the forefront of this transformation, leveraging their strategic locations, robust digital infrastructure and ambitious national visions. Dubai, in particular, has established itself as a regional datacentre hub, boasting world-class connectivity and a regulatory environment that attracts both global enterprises and cloud providers. Abu Dhabi and Riyadh are also key centres, with significant investments in innovative city projects and AI-driven initiatives.

Saudi Arabia’s Vision 2030 and the UAE’s National Strategy for Artificial Intelligence 2031 are not only catalysing domestic demand but are positioning these nations as global technology hubs.

“The region’s going through a major digital transformation, with more people and businesses moving to the cloud,” says Shumon Zaman, chief information and digital officer at Ali & Sons.

“Then there’s the explosion of smart city projects like Neom in Saudi Arabia, which need powerful tech backbones to run. Plus, governments are pushing for data localisation, keeping data within national borders, which means local datacentres are a must. Lastly, there’s a big shift toward sustainable energy, and new datacentres are being built with green tech in mind.”

Walia and Moreno-Gomez from Analysys Mason add: “For example, in Saudi Arabia, digital transformation is a core part of Vision 2030. There’s a whole ecosystem of programmes that have been put in place, from the Digital Government Strategy and the establishment of the Digital Government Authority to widely used platforms like Absher, Seha Virtual Hospital and Tawakkalna. These are real, tangible efforts that are making a difference in how citizens engage with government services.”

The UAE is also making rapid progress on this front. Its Digital Government Strategy 2025 is very focused on creating user-centric, data-driven services. And it’s not just about the front end, the government is also investing heavily in infrastructure, particularly around cloud and AI, through initiatives such as the National Strategy for Artificial Intelligence 2031.

At the same time, the GCC is seeing a massive surge in demand for AI inference, cloud and digital services. Between 2025 and 2029, cloud services in the region are projected to grow at a compound annual rate of 9-11%. This is being fuelled by changing consumer behaviour, more e-commerce, digital payments, gaming and streaming. All of this is adding pressure on the existing infrastructure and creating strong demand for both hyperscale and colocation datacentres.

The hyperscaler wave

The Middle East’s strategic importance has not gone unnoticed by global hyperscalers. Amazon Web Services (AWS), Google Cloud, Microsoft Azure and Oracle have all established or announced cloud regions in the UAE, Saudi Arabia and Qatar, often partnering with local telecom giants or government-backed entities.

Amazon Web Services, for instance, has committed more than US$5bn to develop new datacentres in Saudi Arabia, while Google Cloud and Microsoft have launched cloud regions in Dubai and Dammam, respectively. 

While global players make headlines, local providers are equally instrumental in shaping the region’s datacentre landscape. Khazna Data Centers, headquartered in Dubai, is a standout example. With a mission to build and operate highly secure, energy-efficient and scalable facilities, Khazna has become a trusted partner to enterprises seeking cost-effective, sustainable infrastructure. 

“Because of the growth we have seen in the region in Khazna, we have increased our capacity. During Covid, the way businesses adopted the cloud enabled us to scale to fulfil their needs. For us, the demand is in the GCC, mainly because of local regulations where data is required to be kept within the country,” says Greg Jasmin, head of international client development at Khazna Data Centres.

A global digital hub in the making

As the digital economy expands, the Middle East is poised to play a pivotal role in global data networks, supporting a range of applications including AI, cloud computing, e-commerce and smart cities.

The dynamic interplay between cost, energy savings, technological innovation and regulatory alignment is shaping a market that is not only growing rapidly but also setting new standards for efficiency and sustainability.

As Analysys’ Mason says: “It’s a combination of top-down policy and bottom-up market demand that’s driving this momentum.” In this environment, the Middle East stands poised to become a critical node in the world’s digital future.