As booming data centre demand continues – buoyed by increased data flows from AI and rising incomes – the Gulf Cooperation Council (GCC) is positioning itself as a global data centre hub, a new report suggests.
The GCC is a political and economic alliance of six states in the Middle East and North Africa (MENA) region, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). According to the GCC Data Centre Projects Market 2026 report, these regional governments are advancing industrial plans such as the UAE’s National AI Strategy and Saudi Arabia’s National Strategy for Data and AI, which seek to address multiple obstacles around data centre construction and adaptation.
There are already multiple major data centre projects in the region. In Saudi Arabia alone, there is a 36MW-capacity data centre in NEOM City’s Oxagon industrial area under development, as well as a 72MW data centre in Riyadh owned by Humain, an AI company backed by the Public Investment Fund (PIF).
The report outlines some of the challenges affecting data centre buildout, such as power constraints, infrastructure bottlenecks, the rise of edge computing, and operational challenges like limited land and labour availability.
It notes many regional characteristics that enable the GCC to meet these challenges, such as widely available cheap electricity, government investments and strategic geographic positioning.
Saudi Arabia’s sovereign wealth fund, the PIF, for example, announced a $6bn (SR22.5bn) programme last year to build one of the world’s largest data centre ecosystems. Investments from hyperscalers such as Microsoft, Amazon Web Services and Google are “positioning themselves as neutral hosting zones, offering sovereign cloud services for multinational firms”.
While construction costs for these projects are growing in the UAE and Saudi Arabia, these countries still have lower relative costs than other locations. In Turner and Townsend's Global Data Centre Cost Index (2024 & 2025), Tokyo (Japan), Singapore and Zurich (Switzerland) were the most cost-intensive locations, while Saudi Arabia was in 18th place and the UAE in 46th, out of 52 locations.
The report also highlights the efforts of other regional actors and their digital transformations. Oman, for example, is expanding submarine cable landings and green data centre zones under its national plan to develop the digital economy, Digital Oman 2030. Kuwait has also launched its first hyperscale facility under its own government programme, New Kuwait 2035.
Confirmed investments across the region exceed $8bn, with 500MW of new capacity under development. This buildout is further supported by "national AI strategies, regulatory sandboxes and multi-cloud deployments that are positioning the GCC as a global hub for cloud-driven transformation and enterprise digitalisation".
