Emirates Integrated Telecommunications Company PJSC (du) has announced a partnership with Microsoft to establish a hyperscale data center in the United Arab Emirates.

The project, valued at 2 billion dirhams (US$544.5 million), was unveiled during Dubai AI Week.

Microsoft will be the primary tenant of the facility, which will be delivered in phases, according to a statement from du.

Currently, du operates five data centers throughout the UAE.

The country is investing significantly to position itself as a global hub for AI outside the US.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ UAE’s massive data center expansion reflects broader $9.5 billion regional market strategy

The du-Microsoft hyperscale deal represents just one piece of an ambitious regional data center buildout that’s reshaping the Gulf’s digital landscape.

The GCC data center market is projected to grow from $3.48 billion in 2024 to $9.49 billion by 2030, reflecting a robust 18.2% annual growth rate driven by cloud computing and AI demand1.

This rapid expansion has attracted numerous competitors beyond du, including Khazna Data Centers, Equinix, and Gulf Data Hub, alongside new entrants like Agility and DataVolt intensifying competition across the region1.

Major global cloud providers are racing to establish Middle East presences, with Microsoft’s earlier 2019 launch of two UAE cloud regions now being complemented by Google, AWS, and Oracle building dedicated cloud regions in the GCC1.

The UAE’s strategic positioning between Europe and Asia has made it particularly attractive as a data connectivity hub, with its 99% internet penetration rate further supporting its ambitions to become a competitive digital economy2.

2️⃣ Data centers form the backbone of UAE’s ambitious AI-powered economic transformation

The du-Microsoft deal aligns perfectly with UAE’s National Strategy for Artificial Intelligence 2031, which aims to generate $96 billion in economic value by 2030 through AI implementation3.

The UAE’s AI market alone is projected to reach $46.33 billion by 2030, with hyperscale data centers providing the essential infrastructure needed to process the massive datasets required for advanced AI operations4.