The UAE has established its position as a global leader by significantly investing in artificial intelligence (AI) and data center infrastructure. These achievements reflect the country’s commitment to innovation and technological breakthroughs represented in various projects.
How the UAE has uplifted businesses
The Emirati owner of UAE’s DAMAC Properties, Hussain Sajwani, recently announced a $20 billion investment in U.S. data centers. As the largest investment of its kind, we are seeing a significant shift in focus toward global technological infrastructure. This strategic investment not only expands DAMAC’s footprint and opportunities for real estate investment but redirects global attention back to the UAE for AI and data center advancements.
The UAE has positioned itself as a global leader in AI by embracing the potential of this technology. As one of the first to adopt AI into everyday life, the country has developed an AI strategy to enhance performance across both government and private sectors which reflects the UAE’s commitment to staying ahead in the global AI landscape.
The launch of Falcon AI in 2024, the UAE’s very own open-source AI tool was a strategic choice. By making Falcon publicly accessible, the UAE has not only endorsed AI innovation but has also established itself as a creator and leader in the field, getting significant international attention.
Additionally, the UAE has actively hosted and participated in all major global AI industry events, establishing its reputation as a key player in this space. These efforts highlight the UAE’s pivotal role in driving innovation and promoting AI on a global scale.
AI and data centers are the future
The rapid advancement of AI is creating a huge demand for data centers and infrastructure, with information and content now being generated at rapid speeds. AI tools, such as ChatGPT, Gemini, and CoPilot, demonstrate how minimal input or prompts can produce full-length and detailed articles, emails, and reports almost instantly. This increasing use of AI makes it clear just how necessary it is to have scalable, high-capacity data centers, which will be able to meet these evolving demands.
The UAE is investing heavily in AI infrastructure. While data centers already exist in the UAE, it is a new trend to see AI-specific data centers. The Khazna AI Data Center is a prime example. Its launch was announced during GITEX Global 2024. Located in Ajman, this 100MW facility is being designed specifically for AI optimization and is expected to be operational by Q3 2025. As AI adoption surges among businesses and the public, the demand for data centers will continue to increase.
The business case for data centers in the UAE is also compelling, driving private investment and business expansion in this sector. At Sovereign PPG, we have already set up a high number of licenses for data center construction, management, and maintenance.
With readily available low-cost power generation, high availability of land, world-class infrastructure, and ultra-fast connectivity that the UAE has invested in, this places the UAE in a great position to benefit from the growth in data centers and the digital economy generally. The availability of skilled engineers and low costs of employment — together with the UAE being a low-tax jurisdiction — all contribute to companies looking at further investment in the region.
Read: UAE government, WEF launch ‘We the UAE 2031 Strategic Intelligence Councils’
Expected trends to follow with this project
The UAE’s traction in the AI industry means it is likely to remain at the forefront of AI innovation, driving adoption across both public and private sectors. The UAE, particularly Abu Dhabi, is playing a critical role in advancing the AI space through initiatives such as the Advanced Technology Research Council (ATRC), a government entity leading cutting-edge research, and other incubators and AI start-up support programs.
These include those offered through the Abu Dhabi-based Hub71 and the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) Incubation & Entrepreneurship Center.
With projects like the Khazna AI Data Centre, we anticipate a surge in accelerators and incentives aimed at encouraging businesses to engage in IT, computer systems, software, and AI development. The growing demand for data centers will also drive investments in IT infrastructure, as these facilities require large physical spaces to operate efficiently.
The options for mainland and free zone business setup are growing for data centers. Free zones, such as KIZAD and Dubai Industrial City, are two examples of locations offering large warehouse space. Businesses will be looking at what infrastructure exists to support AI-driven activities and will form their decisions on where to set up based on this but also the flexibility and space needed for expansion and growth.
The UAE is well positioned to continue to benefit from the growth in investment in data centers and the infrastructure required to fuel the demand created by AI and increasing data storage, management, and transmission, while ensuring the correct licensing and regulation is in place to manage this growth.
Zana Jablan Musa is the operations director at Sovereign PPG UAE.
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