Saudi Arabia and the UAE are aggressively pursuing plans to build extensive artificial intelligence infrastructure, even as data centers in the region have become targets amid the US-Iran conflict. These nations view AI compute as a crucial avenue for economic growth beyond oil. The UAE, through state-backed firms, is progressing with a large AI campus in Abu Dhabi aiming for five gigawatts of computing power, with the first 200 megawatts expected online in the fourth quarter. Similarly, Saudi Arabia's Public Investment Fund-backed Humain plans to raise an initial $2.5 billion from investors to build data centers across the kingdom, targeting over six gigawatts of computing capacity.
The push for AI infrastructure is occurring despite heightened security concerns. In March and July, AWS facilities in Bahrain and the UAE were reportedly damaged by drone and missile strikes, underscoring the risks. Integrated Security Systems estimates that strengthening physical security measures could increase build costs by approximately 5% to 7%. Major partners like OpenAI, Microsoft, and Nvidia are weighing these higher operating risks and costs. For instance, Amazon plans to provide up to 50 megawatts within Saudi Arabia's first AI Zone by 2028, and Microsoft's Saudi Arabia East cloud region is set to open in November 2026.
Oil money is a significant driver behind this boom. Abu Dhabi's MGX recently secured $49 billion for an AI-focused fund, and state-backed investors in the region continue to be key backers of AI companies. Saudi Arabia's investments in data centers have exceeded $4.26 billion since the launch of Vision 2030, with installed capacity growing from 68 megawatts in 2021 to around 440 MW in 2025. Humain aims to develop 1.9 GW of computing capacity by 2030 and 6.6 GW by 2034, backed by an investment envelope of approximately $77 billion and a target of deploying 600,000 GPUs. The Kingdom’s unique advantages include sovereign capital, low power costs, ample land, and a streamlined decision-making process for permits and energy policy, positioning it as a significant regional AI hub. However, long-term success hinges on continued commitment from Western hyperscalers and clear US regulatory alignment regarding advanced chip exports.
