Abu Dhabi-based AI powerhouse G42 and Microsoft have announced a significant 200-megawatt (MW) expansion of Microsoft’s data centre capacity in the UAE. This move is designed to meet the escalating demand for advanced AI and cloud services in the region. The infrastructure will be delivered through Khazna Data Centers, a subsidiary of G42, with the new capacity expected to come online before the end of 2026.
This expansion is a key component of Microsoft’s recently announced $15.2 billion investment in the country and will substantially increase the capabilities of Microsoft Azure’s secure and sovereign cloud services.
Bolstering a National AI Vision
The partnership directly supports the UAE’s national digital economy strategy, which aims to double the digital economy’s contribution to the nation’s GDP over the next decade. By providing world-class AI and cloud infrastructure, complete with advanced GPUs, the expansion empowers public sector organisations, regulated industries, and enterprises to innovate and scale their operations effectively.
This development reinforces the UAE’s growing status as one of the world’s most dynamic data centre and cloud services markets, further cementing its leadership position in the regional digital economy.
A Landmark Investment Framework
The 200MW project is part of Microsoft’s landmark $15.2 billion investment commitment to the UAE by 2029, the largest ever announced by the software giant in the Middle East. More than $7.3 billion has already been deployed since 2023, including a $1.5 billion equity stake in G42 and over $4.6 billion in cloud infrastructure.
The remaining funds are allocated to local operations and the development of AI talent, underscoring Microsoft’s deepening strategic ties with both G42 and the UAE government.
Khazna’s Hyperscale Ambitions
G42’s subsidiary, Khazna Data Centers, is at the forefront of this digital infrastructure boom. The company is delivering the foundational infrastructure layer for Stargate UAE, the next-generation AI cluster that is part of the planned five-gigawatt UAE-US AI Campus in Abu Dhabi.
Beyond this project, Khazna has announced ambitious plans to add more than one gigawatt in operational capacity over the next five years. This includes deploying over 400 megawatts of new capacity across international markets like Saudi Arabia and Italy, alongside expanding its domestic facilities in Abu Dhabi, Dubai, and Ajman, positioning Khazna as one of the fastest-growing hyperscale data centre platforms globally.
Fostering Responsible Innovation and Talent
The partnership is anchored in a shared commitment to trust, security, and responsible innovation. High standards of cybersecurity and data protection are ensured through the Responsible AI Future Foundation, an initiative established by Microsoft, G42, and the Mohamed bin Zayed University of Artificial Intelligence.
Furthermore, Microsoft’s commitment extends to human capital, with a pledge to skill one million people in the UAE by 2027. This builds on existing initiatives like the Global Engineering Development Center and the AI for Good Lab in Abu Dhabi, which are dedicated to nurturing local talent in AI, cloud, and digital services.
About G42
G42 is a global leader in artificial intelligence and a technology holding group born in Abu Dhabi. Operating worldwide, the company is advancing its mission to build the Intelligence Grid, an interconnected infrastructure for intelligence designed to empower people, industries, and nations in the AI era.
Source: Middle East AI News
