Toward New Frontiers : The Gulf Conquers the Data Center Market
By 2025, nearly 4,800 data centers will be operating worldwide. Today, 5% of them are located in the MENA GCC region (Middle East, North Africa, and Gulf countries), a figure set to grow. Last month, over $21 billion in investments were announced in Saudi Arabia to develop these strategic infrastructures. Alibaba Cloud, for its part, has invested $238 million to boost cloud and artificial intelligence capabilities. With its accelerated digital transformation, Saudi Arabia embodies the digital shift gradually taking place across the Middle East. Riyadh also plans to invest $2 billion in space, notably through the creation of Neo Space Group. As the global digital transition accelerates, the Gulf is positioning itself as a new hub for data centers. With cutting-edge infrastructures, government ambitions, and the rise of smart cities, the region shows dynamics similar to China, with comparable landmass (7.27 million km² versus 9.60 million km²) and a history marked by rapid industrialization.
Data Centers in the Gulf : The Rise of Regional Leaders
Among the seventeen countries bordering the Mediterranean basin, 239 data centers are in operation. Israel has 56, closely followed by Saudi Arabia with 35, and the UAE, which has 32. There are also 20 data centers in Iran and 14 in Egypt. Even the West Bank has a data center in Ramallah : the Zone Data Center, located in the Masrouji Building. This Palestinian company, founded in 2008, has emerged as a leader in cloud services, offering fast and efficient business solutions. This notable example demonstrates how the Middle East’s geographic, economic, and political diversity is being transcended by technological breakthroughs that are driving development.
Building on its technological advances, the UAE is diving into the field of artificial intelligence via ever-more powerful data centers. The next one will be the result of a collaboration with the Élysée. On February 6, Mohamed bin Zayed Al Nahyan and Emmanuel Macron discussed a campus focused on AI, with computing power potentially reaching one gigawatt. This project, with investments ranging from €30 to €50 billion, once again illustrates MBZ's push toward a post-oil economy.
Partnerships are multiplying to strengthen the local ecosystem. Qatari operator Ooredoo, also present in Kuwait and Algeria, recently signed a deal with U.S. giant Iron Mountain, the world leader in information management. The goal : to accelerate the growth of data centers in the MENA GCC region by combining local grounding with global expertise. By facilitating the approval of construction permits and focusing on smart cities, Gulf governments are redefining the way digital infrastructures are deployed.
The Booming Data Center Market : Are Middle East Countries on a Chinese Trajectory ?
According to the 2024 report by Modor Intelligence, the data center market in the Middle East is currently fragmented, with the top five players representing only 29% of the market. Among them, Bezeq International General Partner Ltd, EdgeConneX Inc., and Etihad Etisalat Company are competing in a booming industry. The numbers are striking: with a market volume estimated at 1,460 MW in 2024 and a compound annual growth rate (CAGR) of 14.80% by 2029, the sector is expected to reach 3,230 MW by that time. The UAE stands out as the main hub in 2023, thanks to an advanced fiber optic infrastructure and a policy favorable to data center investment. Saudi Arabia, meanwhile, is experiencing the fastest growth, driven by an $18 billion investment strategy launched in 2021.
The comparison with China is inevitable. The Asian giant, which had 443 data centers in 2022, is aiming for a CAGR of 15% by 2029. This ambition is based on industrialization that began in the 1970s and economic opening spearheaded by Deng Xiaoping in the 1980s. This dynamic is now evident in the Middle East, where governments are injecting massive capital to build a robust digital economy. While the U.S. remains far ahead with 2,701 data centers and a CAGR of 14% between 2025 and 2034, the MENA region shows a clear potential to catch up, thanks to initiatives like those in Saudi Arabia and the UAE. Arcadis’ data center location index also places the UAE at the top for mobile broadband penetration, a key asset for attracting investors.
Reducing Energy Footprint: Solutions to Data Center Challenges
Despite its growth potential, the data center market faces several major challenges, primarily concerning energy consumption and environmental impact. A data center requires large spaces and consumes an average of more than 20 kW. Energy efficiency thus becomes a critical issue, especially through optimized cooling systems and heat recovery.
Sustainability depends on several levers : the size of the data center, the security of the facilities, the energy source used, and the intelligent management of resources. Data center energy consumption varies depending on their operating model. Three main categories stand out :
• On-premise data centers, owned and operated directly by companies, which guarantee full control over data and security. This is particularly the case in Saudi Arabia, where Saudi Aramco owns and manages its own infrastructures to ensure the confidentiality of its information systems.
• Managed data centers, where specialized providers offer hosting and data management services. In the UAE, for example, global leader Equinix operates several centers in Dubai, enabling companies to benefit from secure solutions without investing heavily in their own facilities.
• Cloud computing models, which optimize and pool infrastructure under the banner of tech giants such as Amazon Web Services, Microsoft Azure, or Google Cloud.
Cloud computing, by optimizing infrastructure pooling, provides an effective solution to reduce companies’ carbon footprints. Cloud operators invest in virtualized infrastructures, automated server management, and optimized geographical service location. They also develop less energyhungry data centers, relying on low-carbon energy sources and advanced cooling solutions. A study by consulting firm Capgemini highlights that cloud computing, with its virtualized infrastructure and automated server management, is the ideal model for significantly reducing corporate carbon footprints. This option is gradually expanding in the region. Since 2019, infrastructure set up by Amazon Web Services (AWS) in Bahrain has allowed businesses, startups, and the government to access secure cloud services.
Riding the cloud wave, Saudi Arabia is also strengthening its position with the launch of Alibaba Cloud in Riyadh. Developed in partnership with Alibaba Group, eWTP Arabia, Saudi Company for Artificial Intelligence, and the Saudi Information Technology Company (SITE), Alibaba Cloud aims to equip the country with cutting-edge cloud infrastructure to accelerate digital transformation and strengthen technological sovereignty.
Scientific progress and the growth of technological literature point to a more optimistic future than predicted by the doom-mongers. With the immaterial projection of data collection services, the economic and climate impacts could be significantly mitigated. As the saying goes : "Every cloud has its silver lining."
Sources :
Capgemini : L’apport du cloud pour un numérique responsable Data Center Map : Middle East
Data Centers Data4 : Qu'est-ce qu'un datacenter ? France Info : article publié le 07/02/2025
Investment Monitor : Amazon's hyperscale data centre accelerate Bahrain's digital transformation
Turner & Townsend : An in depth look at data centers in the Middle East
