Artificial intelligence is often discussed in software terms, as a shift in how organisations automate work and make decisions. But behind every AI tool, cloud platform, and digital service is a growing demand for physical infrastructure.
According to the International Energy Agency, data centres accounted for around 415 terawatt-hours of electricity consumption in 2024, approximately 1.5% of global electricity use, with demand growing by around 12% per year over the last five years. To put that into perspective, that is roughly enough electricity to fully charge one smartphone for every person on Earth more than 4,000 times. This underlines the scale of the infrastructure challenge now sitting behind the digital economy.
From digital ambition to built reality
Across the Middle East, AI is increasingly linked to national competitiveness and the wider transformation of government and industry. The UAE Strategy for Artificial Intelligence 2031, for example, is explicitly focused on embedding AI across government performance, services, and future economic growth.
This ambition is already translating into major infrastructure investment. Microsoft and G42 recently announced a 200 MW expansion of data centre capacity in the UAE, with capacity expected to start coming online before the end of 2026.
For the UAE, Saudi Arabia, and the wider GCC, this is not simply a technology trend. It is a major infrastructure challenge, with significant implications for energy, delivery, and long-term operation.
Why data centres are different
Data centres are highly technical assets. They require significant power and advanced cooling, supported by robust connectivity, specialist equipment, physical security, and long-term operational resilience. Unlike conventional commercial buildings, their value is closely tied to how reliably they perform over time.
A delayed grid connection or shortage of specialist equipment can quickly affect programme and cost, while an underdeveloped cooling strategy can undermine long-term operational viability. This makes early planning critical.
Clients and investors need to consider more than location and capacity. Power availability and cooling strategy need to be understood from the outset, alongside procurement routes, long-lead equipment, redundancy requirements, and future expansion. The commercial model and technical brief must be closely aligned, rather than developed in isolation.
Cost certainty in a fast-moving market
As demand increases, cost certainty will become increasingly important, with current market conditions adding further pressure. Data centres rely on complex MEP systems and specialist contractors, with imported equipment often exposed to global supply chain pressures and regional demand.
The Uptime Institute’s 2025 Global Data Center Survey notes that the sector is facing rising costs, worsening power constraints, AI-related demand pressures, staffing challenges, supply chain delays, and unpredictable technology shifts.
In this context, the pressure to accelerate delivery must be balanced with disciplined procurement and realistic budgeting, supported by robust risk management. Value engineering also needs to be handled carefully. Cost cutting in the wrong area can undermine resilience and uptime, or compromise operating efficiency over the life of the asset.
The priority should be whole-life value: balancing capital cost, speed to market, energy performance, operational continuity, and future adaptability.
Sustainability and resilience from the outset
There is also a wider sustainability question. Data centres are energy-intensive assets, and their growth must be considered alongside regional net-zero ambitions and the practical limits of grid capacity and climate resilience.
In the Middle East, where cooling loads are already a significant factor in building performance, energy strategy cannot be treated as a later-stage design issue. It should form part of the earliest feasibility and cost-planning discussions.
The opportunity is considerable. Data centres will play a critical role in enabling AI, cloud computing, smart cities, digital government, financial technology and advanced analytics across the region. But delivering them successfully will require more than technological ambition. It will depend on strong project governance and technical-commercial alignment, underpinned by a clear understanding of whole-life value.
As the Middle East continues to invest in AI and digital infrastructure, the conversation must move beyond innovation alone. The success of the AI economy will depend, in part, on the built assets that support it as well as on the ability to plan, procure, deliver, and operate those assets with long-term certainty and resilience in mind. The AI economy will therefore be defined not only by what the region can imagine, but by what it can reliably deliver.
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