GCC datacenters to grow by %18.85 by 2031
In a recent Research and Market’s report, entitled GCC Data Centre Market, it was noted that the GCC datacenter market is growing at a CAGR of %18.85 from $5.46 billion in 2025 to $15.39 billion by 2031
The main drivers of this growth are sustainability initiatives, integration of AI and automation, and increasing digitalization.
Sustainability is one of the main driving forces as governments and operators in the GCC focus on integrating renewable energy, optimizing resources, and enhancing energy efficiency. Investments in solar-powered infrastructure, advanced cooling solutions like liquid and district cooling, and adherence to LEED and Estidama standards are pivotal in reducing carbon emissions.
A pivotal MOU between the Sharjah Communication Technology Authority, BEEAH, and Khazna Data Centers targeted sustainable initiatives, such as waste-to-energy power sources and greywater recycling, to foster eco-friendly data center growth. Also included is a strategic partnership between Microsoft, ADNOC, and Masdar aimed to power Microsoft’s data centers with renewable energy in pursuit of sustainable growth in the UAE’s data center sector.
How AI is driving GCC datacenters
The GCC is witnessing rapid AI and automation adoption, necessitating robust data centers. This demand supports smart city developments, digital platforms, and sophisticated analytics applications. Saudi Arabia’s National Strategy for Data and Artificial Intelligence (NSDAI) accelerated AI innovation, with projects like Project NEOM and investments in AI infrastructure, shaping Saudi Arabia as an AI leader by 2030. Additionally, the Kuwait Investment Authority partnered with Microsoft and BlackRock, pledging $30 billion towards AI data center infrastructure, signaling a significant push into digital transformation.
As per the report, Saudi Arabia is expected to command the largest market share by 2031, with a focus on power capacity. The UAE also maintains its status as a premier data center location, driven by cloud adoption and digital transformation.
The GCC data center market continues to attract major investments. Noteworthy is AirTrunk’s partnership with HUMAIN, aiming to invest $3 billion to establish advanced data centers and boost AI infrastructure in Saudi Arabia.
New entrants like DataVolt plan significant investments, developing an AI-ready data center facility in Riyadh and a substantial 1.5 GW IT power capacity project in Neom.
Leading infrastructure providers, contractors, investors, and new market entrants propel the GCC data center market. Notable players include Alibaba Group, AWS, Equinix, Microsoft, and Google, emphasizing the market’s competitiveness and attractiveness.
The report comes at a critical time, as the USA has removed restriction on the sale of advanced American technology to the UAE especially when it comes to AI and much needed Nvidia chips.
The UAE government and “approved” Emirati commercial entities will also be able to purchase “advanced computing items” without a license, “consistent with the May 2025 US-UAE Artificial Intelligence Cooperation framework,” the document read.
The restricted classifications are technically known as D:3 and D:4. The UAE has now been moved to the A:5 group.
