Egypt’s play to become an exporter of computing power

Egypt wants to become an exporter of computing power, and regional conflicts might be creating a golden opportunity. Tech executives and government officials in the country are actively courting investors, and the Sisi administration plans to finalize its first national data center strategy before the end of 2026, government officials tell EnterpriseAM.

Egypt doesn’t have the deep pockets or massive energy supply of the UAE and Saudi Arabia, which are investing tens of USD bns in becoming AI computing hubs.

But it has other advantages: Plenty of land to build data centers on, undersea cables that connect to North and Sub-Saharan Africa, Europe and Asia, and a growing pool of tech talent. The number of trainees in technology fields rose from 4k in the government fiscal year ending in June 2019 to 500k in the year ending June 2025, then-Communications Minister Amr Talaat said in December.

The kicker: And Egypt’s not living under the constant threat of Iranian drone strikes, which are sparking investor anxiety (but no backing out — yet) when it comes to the major AI buildouts in the Gulf. Political violence insurance premiums for Gulf coverage have jumped anywhere from around 600% to almost 10k%, Omar Gemei (LinkedIn), a top executive in Marsh’s Dubai office, tells EnterpriseAM.

The upshot: Combine those elements with a massive and growing global hunger for AI computing power and Egypt may have a shot to transform from a minor player into a significant regional power.

“AI is where the value add for Egypt is,” Hossam Heiba, managing director of Orbis Capital and former head of General Authority for Investment (GAFI), the state investment promotion and regulation agency, tells EnterpriseAM. Pairing data centers with local AI work “increases revenue, creates job opportunities, and helps Egypt stay part of global technology advancements,” he says.

But it’s a long road from here to there. Egypt has somewhere between 15 and 60 MW of installed data center IT load capacity, depending on the estimate, and only c. 20 MW of new capacity is firmly committed. Companies have unveiled plans that would push capacity to 400-500 MW, but haven’t secured funding for those more ambitious plans yet, as our Egypt desk previously reported.

One big player is Africa Data Centres Egypt, a consortium of Vodafone Business, Elsewedy Electric, and UK-based Cassava Technologies. The group has committed to bringing online 20 MW within three years. It’s the same consortium responsible for the 20 MW of already-committed data center capacity (above) and it ultimately hopes to scale to 200 MW of total capacity, with a total investment of up to USD 1 bn.

Other announced plans include:

• A USD 2.1 bn project by Gulf Data Hub and Elsewedy Data Centers, first announced under a 2023 MoU, for up to 192 MW.
• A planned 25 MW facility in Maadi built by Khazna, the data center arm of UAE AI champion G42, with local partner Benya Group. Here are details from EnterpriseAM Egypt.

Orange Egypt is also talking with local partners about building AI data center capacity, Hazem Gebili, the company’s chief AI and digital officer, tells EnterpriseAM. He declined to provide details of the prospective deals. “Hopefully you’ll hear good news soon,” he says.

Security is one big selling point. Egypt has been almost totally spared from the Iranian drone and missile strikes that have pummeled Gulf nations and their data infrastructure off-and-on since the war began — likely making it a more attractive place to build data centers, which are highly vulnerable to physical attack. The one exception was a July drone strike that hit gas storage vessels at Damietta Port, which Iran has not officially claimed responsibility for.

The (potential) caveat: Cairo has, so far, avoided direct involvement in the war except as a mediator urging de-escalation, but may soon send troops to help Saudi Arabia defend itself against Houthi attacks. The House of Representatives ended a second closed-door session on Monday without a decision on authorizing military support for the kingdom if Riyadh requests it. Debate will resume on Monday, 26 October.

Background: Iranian drones hit two Amazon Web Services data centers in the UAE and one in Bahrain during the early weeks of the war, causing structural damage, power outages and fires. Amazon has been unable to restore access to cloud services in Bahrain and parts of the UAE since then, the company acknowledged in September. Iran’s Revolutionary Guard Corps has explicitly warned that AI infrastructure linked to US companies is a legitimate war target.

To be clear: This doesn’t mean that Egyptian data centers might not become an Iranian target or a target in some future regional conflict — but being relatively more protected against Iranian attacks is a big selling point for global investors right now. Data center operators in the Gulf and Ukraine have focused on making their infrastructure more resilient against attacks by burying sensitive data underground and putting up drone-catching nets. The UAE’s G42 is also mulling spreading its planned 5 GW Stargate UAE campus out over multiple locations rather than concentrating it into a single 26 sq km campus in Abu Dhabi.

Not just AI: Egypt has also become a hedge for UAE oil and gas companies with export routes constrained by the Strait of Hormuz closure, as our EnterpriseAM UAE colleagues reported yesterday. Other logistics providers are also more interested in Egypt than they were before the outbreak of the war early this year as “redundancy” becomes the watchword.

Location is another selling point. Egypt offers “low-latency access to Europe and Asia,” according to the US Commerce Department’s International Trade Administration. And its undersea cables give it fast connections to Africa too, where data centers are still scarce, Justin Alexander (LinkedIn), director of Khalij Economics, tells EnterpriseAM.

A Gulf backup? One possibility Egyptian firms are looking at is providing backup services for Gulf data centers so they can ensure customers stay online and don’t risk losing data in the event of a physical attack or natural disaster. That’s technically possible, but would require some negotiating to ensure Egypt can provide all the legal protections for customer data that Gulf companies want.

A safe haven: “When I am at risk, it’s natural for me to think quickly and search for a safe haven that is nearby and that I can rely on,” Heiba says. Saudi AI champion Humain declined to comment for this story. G42 did not reply to a request for comment.

Gulf companies already have a foothold. More than 35 of them, including 16 Emirati firms, run formal outsourcing and AI operations in Egypt, a government source tells EnterpriseAM. Significantly more run smaller operations across the country.

Spillover demand from Europe: Egypt is also well situated to provide computing services to Europe, which has struggled to build enough data center capacity to meet demand — mostly because of long delays building the necessary infrastructure to connect to the continent’s outdated electrical grids.

Egypt can connect data centers to its grid far faster, but also has its own energy challenges. The country relies on natural gas for about 80% of its power generation, which it increasingly has to import, making its energy supply more vulnerable to supply shocks. When the Iran war began, for instance, Israel halted its gas supply to Egypt and global energy prices spiked. Pipeline gas imports plunged 78% month-on-month in March, and natural gas made up 45% of Egypt’s fuel import bill in the first quarter, at USD 2.5 bn, our colleagues at EnterpriseAM Egypt reported.

BUT: Egypt has in recent years proven it can build world-scale renewable energy infrastructure quickly and it’s building a deep feeder industry. Just yesterday, the EBRD said it had arranged USD 265 mn in financing for a 1.2 GW solar facility in Minya being built by Infinity Power and HAU Energy. It will be the biggest solar plant in Africa when it comes online.

Even if Egyptian electricity comes at a higher price, “companies will be willing to pay that price because electricity is now scarce around the world for data centers,” Dina Kamel (LinkedIn), a partner at law firm Zaki Hashem whose focus areas include telecommunications, media, technology, and data protection, tells EnterpriseAM.

Finally, there’s sure to be plenty of demand at home, too. Egypt has more than 109 mn people, and the Electricity Ministry expects the telecom industry to need c. 1 GW of power over the next two years, a government source tells EnterpriseAM. “Having a data center in Egypt is a must, because Egypt itself needs to have hosting for its own data,” Heiba says.

But there are also some barriers. Egyptian firms need approval from the US Commerce Department to buy AI chips from Nvidia and other US suppliers and it’s unclear if they’ll get access to the highest-end chips, which the US is providing to the UAE and, in a more limited way, to Saudi Arabia.

Caught in the great power struggle: Huawei has offered to sell more than 1.4k of its newest Ascend 950-series chips for an AI training cloud in Egypt used by government customers. Buying Huawei chips would be bureaucratically easier than buying from Nvidia.

BUT: Washington has warned that using certain Huawei Ascend chips would violate its export controls — teeing up a conflict between Cairo and Washington and reducing the likelihood of cooperating with Gulf AI firms, which rely pretty much exclusively on US chips. (China is also increasing export controls on its AI tools. More on that below in AI in Business.)

TL;DR: There’s a lot still to figure out, but advocates see a big opportunity. “I think we need the right framework and the right pricing,” Kamel says. “But we have the political will and we have the regulatory will as well. So I think it is going to see the light.”