Data centres in the Middle East remain the subject of much conversation. At Capacity Middle East last year, it was stated that the data centre market in the Middle East was undergoing unprecedented growth and projections indicated that it would double by 2030.  

The surge at the time was attributed to increasing multi-tenant data centre requirements, government digital transformation initiatives, cloud adoptions and continued hyperscaler investments.  

Momentum continues to build one year later. With interest from the US and significant partnerships and MoUs taking place, the data centre industry in the Middle East is expected to continue to boom. 

“The Middle East is entering a decisive moment for digital reinvention, as the region continues to invest in core network infrastructure and is fast becoming a global epicentre for AI data centre investment,” Pete Hall, regional managing director for the Middle East and Africa at Ciena, told Capacity. “

Across the Gulf, hyperscalers, telecom providers and sovereign entities are pivoting to AI-native architectures, data centres purpose-built to support large language models (LLMs), edge inferencing and real-time, latency-sensitive workloads.” 

The AI data centre opportunity across the Middle East 

Experts have stated that continued AI interest has prompted the rapid investment and development of digital infrastructure. As the region continues to emerge as a global technology powerhouse, forward-looking policies from the Gulf Cooperation Council (GCC), for example, have been put in place to support resilient AI-driven economies.  

According to Gartner, technology spending in the MENA region will reach US$169 billion this year. 

Ciaran Delaney, COO at EXA Infrastructure, said: “Gartner expects spending on data centre systems to see the most significant growth over the course of the year. With so much of what is digitally possible being underpinned by expanded data centre facilities, that’s no surprise.  

“However, AI compute is only valuable if it can move quickly, securely and at scale, to wherever it’s needed. As it currently stands, the Middle East has some work to do to build out that underlying connectivity. For both industry and government alike, this represents a golden (and timely) investment opportunity.” 

The region, most notably the UAE and Saudi Arabia, is moving quickly to establish itself as a global AI hub, leveraging interest in AI compute to gain state-supported investment and rapidly deploy infrastructure.   

AI has also been positioned as a critical pillar of long-term economic policy for the region, with the UAE’s National Strategy for Artificial Intelligence and Saudi Arabia’s Vision 2030 putting computing at the centre of sovereign-led future growth. 

“This strategic vision is already taking place on the ground, with hyperscalers launching and expanding cloud regions across the Gulf, and local operators scaling data centre capacity to keep pace with demand,” Delaney explained. “Governments are investing in specialised research institutions to help cultivate ‘home-grown’ AI expertise and reduce dependence on foreign innovation.” 

This was the case in September, when Abu Dhabi’s Technology Innovation Institute and Nvidia launched a joint research lab, marking the first Nvidia AI Technology Center in the Middle East. The centre focuses on advancing AI models, robotics and high-performance computing (HPC) 

Delaney added: “These research efforts complement sovereign AI programmes and major infrastructure projects, underscoring the Middle East’s evolution from AI adopter to AI innovator, with ambitions to compete on the global stage.” 

Overcoming potential pitfalls 

At the same time, much of Europe is struggling to generate enough local compute capacity to meet demand. It perhaps poses the concern that local compute is not enough, with large-scale AI compute being more concentrated in regions where power availability and economies are more favourable – including in the Middle East. 

“This creates a notable dependency on cross-border data movement,” said Delaney. “AI workloads generate massive data flows between data centres, so networks need to be able to support high volumes of traffic and a dense web of interconnections and move data quickly, reliably and with minimal latency.  

“Europe will need to rely on compute from beyond its borders, particularly for bandwidth-intensive workloads. Gulf-based infrastructure, then, is emerging as a natural extension of Europe’s digital ecosystem, positioned perfectly to be a source of ‘digital energy’ to support the continent’s next phase of growth.” 

As these new hubs in the Middle East emerge, questions concerning diversity of connectivity, if fibre is strong enough and permitting timelines for subsea routes are now the main conversation. Ultimately, sovereign AI and fibre-first strategies are fast-becoming the foundation for a reimagined digital economy, particularly in the Middle East. 

Hall argued that ensuring these hubs are intelligently connected will be paramount to unlocking their value at scale. 

“Tomorrow’s data centre environments must be fluid and responsive,” he added. “AI will continue to demand more. This is a pivotal moment, not just of transformation, but of reinvention. With bold national visions, greenfield campuses and cross-border partnerships, the Gulf isn’t simply building digital infrastructure, it’s reengineering the AI backbone for the Global South and beyond.” 

The powerhouse potential 

With abundant land, power and water availability and lower costs, the Middle East is expected to continue appealing to data centre businesses. According to Research and Markets, the Middle East data centre colocation market is expected to witness investments of roughly $33.79 billion from 2025 to 2030, growing at an absolute growth rate of around 195.21% from 2024 to 2030. 

Such rapid growth, however, will depend on robust digital infrastructure and on the networks that connect the region. 

“Terrestrial and subsea networks need to be able to carry great volumes of data securely, reliably, and at scale between regions,” Delaney said. “As AI-era traffic grows, targeted investment from industry and government will be key to preventing congestion or downtime.” 

Delaney suggested that diversifying subsea routes between Europe and the Middle East is necessary to strengthen network resilience moving forward. He also said investment should focus on reinforcing terrestrial backbones into Europe, “especially connections linking southern, central and eastern markets to major cloud and hyperscale data centres”.  

He explained: “These inland routes ensure that international traffic can reach major compute hubs efficiently, reducing latency and congestion while supporting distributed workloads across multiple regions. 

“Networks themselves should be designed and built with the AI era in mind. Choices made today will no doubt define performance, reliability and resilience in the years to come, so it’s worth taking the effort now, so it can payoff down the line.” 

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