Middle East Data Centres: The Rise of the World’s Next Hyperscale Powerhouse

SEME spoke with Peter Dempsey of Axis Communications about the region’s digital gold rush, and how the Middle East is positioning itself as the world’s next hyperscale powerhouse.

The Middle East is undergoing a seismic digital transformation. Once viewed as a secondary market for cloud and data services, the region is now at the epicentre of global hyperscale expansion, with sovereign vision, foreign investment, and world-class infrastructure fuelling its rapid ascent.

From Abu Dhabi and Riyadh to Doha and Muscat, countries across the Gulf Cooperation Council (GCC) are attracting the world’s largest technology players with a rare combination of low-cost energy, progressive policy, skilled talent, strong connectivity, and deep capital.

Data Sovereignty: A Strategic Imperative

At the heart of the Middle East’s data centre boom is a growing focus on data sovereignty and localisation. Governments across the region are enacting legislation that requires data, particularly that belonging to public entities, critical infrastructure, or citizens, to be stored and processed locally.

Key legislative developments include:

·         UAE Federal Decree Law No. 45 of 2021 (PDPL) - This comprehensive data protection law prohibits international data transfers unless the destination offers comparable safeguards.

·         Saudi Arabia’s Personal Data Protection Law (2021) - Enforced by SDAIA, the law mandates that personal data must be stored within the Kingdom unless otherwise permitted.

·         Qatar’s Law No. 13 of 2016 - Introduces restrictions on cross-border data transfers, reflecting a strong commitment to national data control.

·         Oman’s Personal Data Protection Law (2022) - Inspired by GDPR, it includes specific localisation clauses, reinforcing regional sovereignty priorities.

These frameworks compel global and regional cloud service providers to build in-region infrastructure. The message is clear: if you want to serve the Middle East, you must operate in the Middle East.

Energy Economics: Powering the Digital World Sustainably

Energy is the lifeblood of any data centre, and in this arena, the Middle East offers a distinct global advantage.

·         In Germany, commercial electricity prices are currently between €0.25–€0.35 per kWh ($0.27–$0.38).

·         In the Netherlands, prices hover around €0.20–€0.28 per kWh.

·         In comparison, Saudi Arabia offers industrial rates as low as $0.048 per kWh, while in the UAE, energy for data centre operations can cost between $0.03–$0.08 per kWh, depending on scale, location, and partnership.

What makes this even more compelling is the clean energy commitment across the region:

·         The UAE’s Mohammed bin Rashid Al Maktoum Solar Park, one of the largest in the world, has delivered solar power rates as low as $0.0135 per kWh.

·         NEOM in Saudi Arabia plans to operate 100% on renewables, offering zero-carbon data centre power.

·         Oman and Qatar are each developing gigawatt-scale solar projects designed to support industrial and cloud infrastructure demand.

This combination of low cost and low carbon is unmatched globally, a decisive advantage for hyperscalers seeking to align ESG goals with long-term cost predictability.

Talent and Innovation Ecosystems

Contrary to outdated assumptions, the Middle East now boasts one of the most vibrant, diverse, and rapidly advancing digital and engineering workforces in the world. What was once considered a talent-scarce environment is now a destination of choice for global experts, innovators, educators, and technology consultants. This transformation is being driven by a blend of government policy, international partnerships, and long-term investment in human capital.

Global Consultancies Establishing Regional Hubs

Today, virtually every global engineering and technology consultancy has established a strong presence in the region. Firms such as AECOM, Jacobs, Arup, WSP, AtkinsRéalis, Buro Happold, and Mott MacDonald operate across the GCC with dedicated teams focused on smart cities, critical infrastructure, and digital transformation. Their Middle East offices are no longer satellite branches, they are strategic hubs, delivering regional leadership, innovation, and on-the-ground project execution.

These firms are working hand-in-hand with local governments and sovereign developers (such as NEOM, The Red Sea Global, and Masdar) to plan and implement AI-ready, cyber-secure, and sustainability-led infrastructure, including hyperscale data centres, digital twin environments, and next-gen transport systems.

Professional Accreditation and Local Standards Bodies

The rapid growth of the region’s digital economy is being matched by the professionalisation and regulation of engineering and IT practices. One standout example is the Saudi Council of Engineers (SCE), which now requires all practicing engineers and consultants to be registered, certified, and regularly updated on sector-specific standards and codes of practice.

Similar efforts are underway across the UAE and Qatar, where entities like Abu Dhabi’s Department of Municipalities and Transport (DMT) and Dubai’s Digital Economy Chamber are helping establish consistent benchmarks for safety, cybersecurity, and system design integrity across smart and critical infrastructure.

These frameworks not only raise the bar for project delivery, they create confidence among global investors that projects in the region are held to internationally recognised standards.

Massive Relocation of Global Talent and Educators

There has also been a marked increase in the relocation of highly skilled talent to the region. Over the past five years, thousands of professionals in AI, cybersecurity, cloud computing, and engineering have moved to countries like the UAE, Saudi Arabia, and Qatar, drawn world-class living standards, and access to career-defining mega-projects.

According to regional HR consultancies, Dubai alone has seen over 150,000 tech-related professionals relocate since 2020, supported by visa schemes like the Golden Visa and Freelance Tech Talent Permit. Riyadh and Abu Dhabi are following closely behind, with digital zones and free zones offering incentives to top-tier global talent, including entire teams from Europe, the US, and Asia.

World-Class Education and R&D Ecosystems

To ensure long-term sustainability of this talent pipeline, regional governments are making significant investments in education and research. Examples include:

·         New York University Abu Dhabi (NYUAD) and Sorbonne University Abu Dhabi, offering top-tier degrees in cybersecurity, data science, and AI.

·         Partnerships between the UAE’s Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) and global institutions like MIT and Oxford University to co-develop AI curricula and research labs.

·         King Abdullah University of Science and Technology (KAUST) in Saudi Arabia, which leads R&D in clean tech, edge computing, and secure networking.

These institutions are not just educating the next generation, they are actively contributing to live innovation ecosystems through sponsored research, industry placements, and start-up incubation programmes.

A Talent Market No Longer in Transition - But in Leadership

The Middle East has shifted from being a passive importer of skills to becoming a regional talent and knowledge leader. Engineers, policy-makers, cybersecurity experts, and AI researchers are no longer visiting the region for short-term projects, they are building careers, companies, and ecosystems that will define the digital future of the Middle East and beyond.

A Surge of Investment: Global Hyperscalers and Local Giants Fueling Growth

Billions of dollars are flowing into the Middle East’s digital infrastructure, creating one of the most competitive and fast-growing data centre markets globally. Sovereign wealth funds, hyperscale cloud providers, regional telecoms, and a new generation of local developers are collectively building the backbone of the region’s digital economy.

The Middle East is fast emerging as the world’s next digital frontier, transforming from a regional data centre hub into a global AI factory. Global cloud giants are making bold moves: AWS is investing $5.3 billion in a new Saudi cloud region, Microsoft is expanding from the UAE to Riyadh, and Google Cloud has already landed in Doha. Regional powerhouses are scaling up too - Khazna Data Centers is targeting over 300 MW of capacity across the UAE, while ZeroPoint DC and Equinix–stc are building hyperscale campuses that will anchor the region’s digital backbone. Meanwhile, real estate and infrastructure leaders such as DAMAC (Edgnex), Gulf Data Hub, Moro Hub, and Datamena are turning connectivity into a competitive advantage through green energy and carrier-neutral designs. At the heart of it all, sovereign wealth funds including PIF, Mubadala, and QIA are fuelling the digital gold rush - financing cloud infrastructure, edge computing, and renewable-powered data ecosystems that will define the AI era.

What makes the Middle East unique is the blending of global expertise with homegrown ambition. Real estate powerhouses like DAMAC, tech leaders like G42, and sovereign giants like PIF are building not only facilities but entire cloud ecosystems aligned to national visions.

Subsea Cables and Global Interconnectivity

The Middle East is now a core digital transit hub, connected by a growing web of subsea cable systems linking Asia, Africa, and Europe. Key developments include:

·         The 2Africa Cable, one of the world’s largest subsea cable projects, landing in UAE, Saudi Arabia, Oman, and Qatar.

·         Oman’s development as a cable landing hub, led by Omantel, supporting hyperscale traffic from India, East Africa, and Southeast Asia.

·         Upcoming cables like Blue-Raman and India-Europe Express are expected to enhance latency, bandwidth, and resilience.

This growing connectivity cements the Middle East’s role as a bridge between continents, ideal for latency-sensitive applications, financial services, gaming, and AI workloads.

Capacity Growth: How the Middle East Compares

The Middle East’s data centre ambitions are not just regional, they’re global. Based on current projections, the region is on track to exceed 1,500 MW of total IT load capacity by 2030, representing one of the fastest growth trajectories anywhere in the world.

Saudi Arabia is leading the charge, with plans and active projects aiming to deliver between 500 and 800 MW over the next five to seven years. The UAE, already a strong player in the regional cloud market, is expected to contribute over 300 MW of new capacity by 2027. Meanwhile, Qatar, Oman, and Bahrain are scaling up edge and enterprise data centre offerings, with strategic investments targeting high-availability and low-latency workloads.

To understand the significance of this growth, it helps to compare the Middle East’s trajectory with some of Europe’s most established data centre hubs. Today, Frankfurt leads the European market with approximately 600 to 700 MW of active capacity, projected to exceed 1,200 MW by the end of the decade. London is close behind, growing from around 500 to 600 MW currently to 1,000 MW or more in the coming years. Dublin, despite its strong legacy as a hyperscale destination, faces constraints due to power availability and regulatory moratoriums, limiting further expansion beyond its current 300 to 400 MW range.

By contrast, the Middle East has no moratoriums, abundant land, competitive energy pricing, and agile, pro-development government policy. This positions the region not only to surpass capacity-constrained markets like Dublin and Amsterdam, but also to rival Frankfurt and London as a globally preferred hyperscale destination.

Stability, Safety, and Cyber Resilience

In an era marked by geopolitical uncertainty, the Middle East, particularly the GCC countries, offers unmatched political stability, economic vision, and physical security.

These nations are investing heavily in:

·         National cybersecurity frameworks (e.g., NCA in Saudi Arabia, UAE Cybersecurity Council).

·         Sovereign cloud offerings, enabling secure government workloads.

·         Advanced threat intelligence and ethical hacking programs (e.g., Bug Bounty Platforms in UAE and Red Teaming initiatives in KSA).

Additionally, the region is investing heavily in AI regulation and AI-powered infrastructure, meaning data centres will increasingly be built with automation, self-healing capabilities, and zero-trust frameworks baked in.

A Region Reimagined

The Middle East isn’t just building data centres, it is building the digital future. A combination of strategic policy, unmatched energy economics, digital talent, capital investment, and geopolitical stability positions the region as one of the most exciting frontiers for cloud and infrastructure growth.

For global technology providers and investors, the message is clear: the digital gold rush is already underway,  and its capital is in the Middle East.