The Middle East data center market is projected to reach USD 9.61 billion by 2029, almost doubling in value since 2023, highlighting the Gulf’s strategic efforts to become a regional tech hub.
The Middle East has long been known as an emerging region in the global technology landscape, particularly in terms of artificial intelligence (AI) development, marking its position as a leading region in the tech-driven world.
Saudi Arabia and the United Arab Emirates (UAE) stand at the forefront of AI dominance in the region, and the rest of the Gulf is on a transformational journey, set to deploy AI-based technology across its industries.
Once seen as a distant dream, the ambitious developments of data center infrastructures in the desert are now a reality. The strategic plans of the Middle East, the advent of new technology, and the rise of AI have brought technological revolution to the desert, resulting in substantial impacts on regional and global economies.
Data Centers as Backbones of AI Development
Data centers are crucial for regions aiming to dominate in the development of AI, serving as backbones for AI advancements by providing essential resources in support of processing and storage needs. These infrastructures support AI research and the deployment of its solutions capable of enhancing operations, and driving economic and technological growth.
Data, the lifeblood of innovation, stands at the heart of artificial intelligence. AI systems rely heavily on the immense information gathered to learn and adapt. As more data is processed, the more efficient AI systems become.
Furthermore, data centers provide crucial storage solutions for this information, ensuring the required processing power needed by AI to function proficiently and effectively is available.
These data centers have specialized hardware, such as Graphic Processing Units (GPU) and Tensor Processing Units (TPU), which fast-track complex calculations and algorithms, and support workloads.
Data centers are essential for AI development, providing the necessary computational power, scalability, data storage, and security to support complex AI tasks. Companies like Google, Amazon, Facebook, and IBM rely on their data centers to power AI-driven services such as voice recognition, content recommendation, and medical diagnostics, showcasing their critical role in advancing AI technologies and enabling innovative solutions across various industries.
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UAE and Saudi Arabia’s Leading AI and Data Center Integrations
Countries with robust data center infrastructures can better harness the power of AI, driving nations to invest and establish more data centers within their borders. The volume of data gathered increases if infrastructures are expanded, enabling greater efficiency and effective AI usage.
Saudi Arabia’s Vision 2030 strategy is central to AI technology integration in the region. The kingdom has proactively established research centers and governmental bodies focused on AI, emphasizing its commitment to driving technological innovation.
By 2029, the kingdom anticipates reaching 855 MW of capacity in the data center market, doubling its current data center capacity, which stands at approximately 429 MW, including those under construction. Aside from Riyadh, Jeddah, and Dammam, investments have also been directed to Saudi Arabia’s new smart city, NEOM.
Conversely, the UAE has established an AI strategy to support its development and progress, positioning itself as a regional and global leader in the AI landscape. Just like Saudi Arabia, the UAE expects to double its data center capacity from 346 MW to 841 MW by 2029.
Equinix, a United States data center operator, is constructing its fourth center in Dubai, with plans to expand to other regions. In 2023, Equinix revealed its third data center facility in the Emirates, the DX3, sustainably powered by 100% renewable energy.
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Significantly, Abu Dhabi announced an AI investment fund in early March this year, with a possibility of reaching USD 100 billion in a few years. Currently, the UAE hosts 52 data centers across the Emirates, with additional developments in the works.
The integration of renewable energy in data center facilities has been actively pushed by the UAE, Saudi Arabia, Qatar, Turkey, and Bahrain, underscoring a collective effort to foster a sustainable future in technology.
Gulf countries like Qatar and Bahrain have also taken necessary steps to mark their leadership in technology and investment through National Vision 2030 and Economic Vision 2030 respectively. The AI Academy was also established, underscoring Bahrain’s commitment to AI implementation and innovation.
Oman is also making significant paces in integrating AI through its Oman 2030 and Vision 2040 projects. Similarly, Kuwait is advancing its AI initiatives through its Vision 2035 and New Kuwait 2035 programs, aimed at utilizing AI and other new technologies to generate more job opportunities in the future.
However, investments in state-of-the-art data center facilities with robust ventilation and cooling systems are crucial in the Middle East, given the region’s location exposure to extreme heat conditions. These HVAC systems will maintain cool temperatures in data centers to operate at maximum capacity.
These initiatives of Gulf Cooperation Council (GCC) countries have been the major drivers of rapid economic and cutting-edge technological advancements, significantly showing the region’s dedication to accelerating strategic developments.
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GCC’s Investment in Data Centers Grows
In the quest for AI dominance, companies in the Middle East are heavily investing in data centers and advancing their technological infrastructure to support cutting-edge AI capabilities.
Center3 (stc), Mobily, Ooredoo, and Khazna Data Centers are among other companies investing in the Gulf’s booming data center market.
Infobip has launched operations and a data center in Saudi Arabia, laying the foundation for robust AI and cloud services.
Rosenberger is unlocking the potential of edge computing with its Intelligent Micro Data Center solutions. By bringing computation closer to the data source, these micro data centers are pivotal in enhancing AI applications that require low latency and real-time processing, thereby supporting the region's AI infrastructure.
The Aqaba Digital Hub is set for a data center expansion in Q1 2024, further bolstering the Middle East's data storage and processing capacity. This expansion is crucial for supporting AI projects that demand significant computational power and data management resources.
e&'s SmartHub Data Center Network connects Abu Dhabi and is integral to the region's AI ecosystem, providing advanced data center services that facilitate AI research and development. Additionally, e&'s Kalba Data Center will anchor the 2Africa cable landing, significantly enhancing connectivity and data transfer speeds essential for AI advancements.
In 2023, du unveiled a new data center to elevate Emirates NBD's IT infrastructure. This facility plays a critical role in supporting AI-driven financial services, enhancing data security, and enabling sophisticated AI applications in the banking sector.
In Iraq, the unveiling of the National Data Center marks a significant step towards modernizing the country's digital infrastructure. This center is expected to support AI initiatives across various sectors, fostering innovation and technological growth.
Moreover, in 2023, Cisco announced plans to establish an edge data center for cloud security in Saudi Arabia, underscoring the importance of secure and efficient data handling in AI applications. This initiative will provide the necessary infrastructure to support AI-driven security solutions and cloud-based AI services.
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Final Thoughts
Artificial intelligence has immense potential to revolutionize industries in the Gulf region, paving the way for groundbreaking innovations and new business models. Its significant impact and rapid transformation have catapulted its value across the globe.
Middle Eastern countries are already at the forefront of establishing digitalized economies and achieving AI supremacy, leveraging advanced technologies to create a more intelligent world for its residents.
With more data center facilities installed in the region, AI’s scope and mainstream adoption will expand, laying the foundation for a new age in an AI-driven world. This data center infrastructure growth will drive unprecedented advancements, not just in telecommunications, but across various industries in the region as well.
Endless possibilities will be unlocked and economic growth will spur. Data will fuel the next generation of technology, with AI as its driving force, mining the avalanche of data in the middle of the desert.
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