Chaired by Rohan Dhamija, managing partner at Analysys Mason, the panel brought together perspectives from global private equity, development finance, subsea operators and digital infrastructure specialists. If one theme dominated the discussion, it was this: the region is no longer simply a source of capital, it is now firmly a destination for it.

From capital exporter to capital magnet

Julian Barratt-Due, managing director at KKR, described a structural shift in how global investors view the Middle East.

“Originally, the region was predominantly a capital formation destination for us,” he said. “Today, we’re also very actively investing capital.”

KKR, which has had a Dubai office since 2009, has accelerated activity over the past year, completing five transactions across private equity, infrastructure and credit. The attraction, Barratt-Due argued, lies in a combination of macro stability and structural growth: a $2.2 trillion-plus economy growing at 3–5%, strong sovereign credit ratings, currencies pegged to the US dollar, and increasingly enabling FDI frameworks.

Crucially, government-led diversification agendas are translating into sustained capital expenditure. “Governments across the region are taking a very long-term view,” he said, pointing to digital infrastructure as a central pillar of economic transformation.

Yet for Ada Ogbunude, senior investment officer and TMT Lead for the Middle East and Central Asia at IFC, the picture is more nuanced. As a development finance institution, IFC focuses on emerging and frontier markets rather than the most mature Gulf economies.

“We need to get intentional about not leaving developing countries behind,” she warned. While the GCC attracts global capital with relative ease, other markets in the region must strengthen regulatory clarity and digital policy frameworks to compete.

At its core, she argued, private capital still depends on fundamentals. “No one is going to a market unless they have confidence that they will make money out of it.” Scalable, sustainable business models, rather than subsidy-dependent projects, will determine where investment flows.

AI and data centres: The scale of ambition

If there was consensus on one vertical, it was data centres, particularly those aligned with AI workloads.

Barratt-Due highlighted the Middle East’s cost advantage on electricity, noting that power pricing is increasingly central to total cost of ownership calculations. But he also emphasised a broader shift: “We’re seeing this convergence between digital and the power industry.” AI’s energy intensity is forcing investors to think as much about grid capacity and generation as about racks and real estate.

Ashish Ahuja, founder and CEO of Sloka Partners, quantified the scale of ambition. The region, he said, is aspiring to build up to 10GW of additional capacity over five years potentially representing $100 billion in data centre infrastructure, and as much as $300–500 billion once GPUs and associated fibre are included.

Even if only half that materialises, “it is still sizeable money,” he noted.

Ahuja was candid that domestic demand alone cannot justify such a buildout. Instead, the region must position itself as a global AI “factory”, serving Europe, Africa and parts of Asia within 50–70 milliseconds of latency. Key enablers include long-term low-cost power, access to capital, particularly sovereign backing geopolitical neutrality, and favourable access to GPUs.

“Capital is not enough,” he cautioned. “You have to be at the front of the queue” for compute resources.

Subsea: Resilience over duplication

No AI hub can thrive without resilient connectivity, and the panel devoted significant time to subsea infrastructure.

Paul Abfalter, chief strategy and revenue officer at Flag Telecom, described the Red Sea as a critical choke point. Recent cable cuts had underscored the fragility of Asia–Europe routes.

“What is really going to hold back data centre investment as it continues to scale is DC-to-DC connectivity,” he said, particularly from a cost and resilience perspective.

While some policymakers advocate more sovereign-controlled routes, panellists pushed back on the idea that the region is approaching overbuild. “We’re a long way away from having excess connectivity,” Abfalter argued, pointing to the need for multipath solutions spanning Saudi Arabia, Iraq, Israel and emerging Mediterranean routes.

Sawan Sachdeva, associate vice president at Tata Communications, framed subsea as critical national infrastructure, akin to power or transport. For AI workloads in particular, resilience is non-negotiable. “The redundancy, the resilience, is the key aspect,” he said. GPU-heavy operations cannot tolerate prolonged outages.

Ahuja added that SLAs must evolve. “The focus has to be from DC to DC,” he said, rather than from cable landing station to landing station. As AI infrastructure scales, operators that can deliver five-nines reliability may command premium pricing.

Regulation: Progress, but uneven

On regulation, the message was mixed. Ogbunude acknowledged positive steps in several GCC markets, particularly around data centres and data sovereignty. However, she cautioned that in some countries, implementation lags policy intent.

In markets such as Iraq, frameworks for tower sharing and other infrastructure models were developed reactively. Regulators, she argued, must become more proactive, anticipating investor concerns and treating digital infrastructure as a strategic asset.

Abfalter noted that while single-country projects such as domestic data centres benefit from strong government backing, cross-border connectivity remains more complex. Geopolitical tensions and incumbent dynamics can complicate execution, reinforcing the role of independent international operators as neutral “interconnectors”.

The talent bottleneck

Beyond capital and cables, talent emerged as a critical constraint.

Ahuja described workforce readiness as “an equally serious challenge as the availability of GPUs”. AI infrastructure, he argued, will increasingly be run as “infrastructure as code”, requiring multi-skilled engineers capable of operating highly automated environments.

Traditional organisational silos will not suffice. Operators must embrace remote hiring, flexible structures and equity-based incentives to compete with hyperscalers. “If you have the capital and you have the power, but you don’t have the right people… you’re going to suffer,” he warned.

Sachdeva added that AI education and continuous upskilling are essential. The technology evolves rapidly, and talent frameworks must evolve with it.

Returns and partnership models

How do returns compare with more established markets? Barratt-Due was measured. Given strong sovereign credit and macro stability, KKR does not necessarily expect a risk premium relative to Europe or the US for equivalent risk. However, higher growth and development exposure can drive higher return profiles in certain segments.

With sovereign wealth funds collectively managing around $6 trillion, differentiation is key. “It’s what you as an investor can bring to the table,” he said. KKR’s minority investment in Gulf Data Hub succeeded not on price alone, but on the operational expertise and global scale it could offer.

Flexibility, across minority and control positions, and across return thresholds, is essential in a market where deal flow, while growing rapidly, is still less continuous than in the US or Europe.

Transport costs: An inhibitor, for now

Finally, the cost of transport remains a structural constraint. Abfalter described it as “an absolute inhibitor” for transit traffic and data centre economics. Limited route diversity and relatively low volumes have kept prices elevated, though new terrestrial and Mediterranean builds may ease pressure over time.

Ahuja was more optimistic, suggesting that AI-driven volume growth will eventually improve unit economics. If the region delivers on its AI ambitions, scale may resolve what regulation and competition have yet to fix.

Taken together, the panel painted a picture of a region at an inflection point: capital-rich, power-advantaged and geopolitically strategic, but still grappling with regulatory complexity, transport costs and talent shortages. For investors willing to navigate that complexity and to partner creatively, the Middle East’s digital infrastructure story is only just beginning.

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