UAE data center capacity to jump 165% by 2028: The UAE’s data center capacity is expected to climb 165% to around 950 MW by 2028, up from 358 MW currently, according to Emirates NBD Research (pdf). The UAE currently operates 35 data centers — 18 in Dubai, 16 in Abu Dhabi, and one in Fujairah — at a 98.7% utilization rate, and leads the GCC with a USD 46.1 bn investment pipeline, representing 55% of the region’s total.

Data center operators are expanding in the UAE: Chinese e-commerce giant Alibaba’s cloud business unit opened its second data center in Dubai to meet rising demand, nine years after it launched its first in the UAE, according to a statement. Meanwhile, Khazna Data Centers’ — already a leader in the market — is investing USD 1.3 bn in five new facilities adding 210 MW. Other major AI infrastructure set to come online include G42’s Stargate campus, which will contribute 200 MW by mid-2026.

REMEMBER- Khazna Data Centers is working on two new 30 MW data centers — AUH4 in Mafraq and AUH8 in Masdar City — set to come online by 2H 2026. Its 100 MW QAJ1 Ajman facility is also expected to be completed in December 2026, and it has two other facilities under construction which Emirates NBD says will take its capacity up to 210 MW. Du is also building a AED 2 bn hyperscale data center in the UAE for Microsoft, which will be its main tenant

Government-to-government cooperation is also giving the sector a boost: Agreements with countries like the US, France, and now, Canada, are helping prop up the sector. Just yesterday, the UAE signed an initial agreement with Canada to boost cooperation in data centers and AI infrastructure, according to an X post.

This came after Economy and Tourism Minister Abdullah bin Touq Al Marri met with Canadian AI and Digital Innovation Minister Evan Solomon in Abu Dhabi to discuss expanding cooperation in advanced technology and AI, state news agency Wam reports. Talks covered developing joint economic partnerships, AI policy exchange, and collaborations in other sectors, well as investment windows between Emirati and Canadian tech firms.

Headwinds remain, with significant energy needed to keep data centers cool in the MENA climate. TheG42 AI Campus alone is set to require more electricity than New Zealand consumes in a year to stay up and running. Annual energy use is expected to rise to some 12.6 TWh, a 127% increase from current levels and equivalent to over 6% of total national electricity consumption. Ongoing battery, solar, and nuclear projects are looking to improve energy infrastructure to cope with the incoming demand.

Advanced cooling solutions could also come to the sector, courtesy of Tabreed…: State-owned district cooling company Tabreed is exploring investment windows in the data center sector, citing strong growth possibilities driven by the industry’s heavy reliance on advanced cooling systems, CEO Khalid Al Marzouqi told Asharq Business (watch, runtime: 11:10) cites as saying. The company will use various financing tools and support from key partners Mubadala and Engie to fund its expansion, Al Marzouqi said.

…and Mitsubishi Electric: Italy-based Mitsubishi Electric Hydronics & IT Cooling Systems (MEHITS) established a new subsidiary in the Dubai Airport Freezone, MEHITS Middle East FZCO, to strengthen its regional air conditioning business presence, according to a press release. The new subsidiary is expected to serve as a regional hub for the design, sales, installation, operation and maintenance of air conditioning and data center cooling systems.

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