The Persian Gulf's wealthiest nations, including Saudi Arabia and the United Arab Emirates, are forging ahead with ambitious plans to construct extensive artificial intelligence infrastructure. This push comes despite data centers in the region becoming repeated targets in the conflict between the U.S. and Iran, leading to increased costs and risks for major technology partners.
In the UAE, state-backed firms are continuing development on a massive AI campus in Abu Dhabi, aiming to add five gigawatts of computing power. This project has progressed even after additional measures were implemented to protect workers during heightened conflict. Khazna, the G42-backed developer, anticipates bringing the first 200 megawatts online in the fourth quarter, reporting no slowdown in customer demand or confidence despite recent regional events.
Saudi Arabia is also making significant strides, with its Public Investment Fund-backed company, Humain, planning to raise an initial $2.5 billion from global and domestic investors. This funding will support the construction of data centers across the kingdom, targeting over six gigawatts of computing capacity. Humain aims to develop 1.9 gigawatts by 2030 and 6.6 gigawatts by 2034, backed by an approximately $77 billion investment and targeting the deployment of 600,000 GPUs. The Kingdom's total investments in its data center sector have surpassed $4.26 billion since the launch of Vision 2030, with installed capacity growing from 68 megawatts in 2021 to around 440 megawatts in 2025.
The rapid expansion in the Gulf is attracting interest from global tech giants like Amazon, Microsoft, and OpenAI, who are partnering in these projects. However, these partners face higher operational risks and costs due to ongoing regional tensions. Integrated Security Systems estimates that strengthening physical security features, such as ballistic and blast-proof panels, could increase construction costs by 5% to 7%. Despite these challenges, local investors reportedly remain unfazed, while foreign investors are split, with some proceeding as usual and others adopting a wait-and-see approach. The long-term success of these mega-projects may depend on continued commitments from Western hyperscalers and clear U.S. regulatory alignment regarding advanced chip exports.
Bloomberg ranked Saudi Arabia second globally after the U.S. for data center market attractiveness. PwC forecasts that the Middle East will see the world's fastest growth in data center investment through 2050, potentially attracting $1.1 trillion in cumulative capital expenditure. The region's appeal is driven by its abundant land, affordable power, and substantial sovereign capital, allowing for large-scale development that private developers cannot match.
