Chinese technology giant Alibaba plans to establish a new data center in Dubai by 2026 as part of a significant global investment in AI and cloud infrastructure. The move, announced at the company’s annual Apsara Conference, positions Alibaba Cloud to capitalize on the soaring demand for AI capabilities in the Middle East and other key international markets.
Fueling The Global AI Boom
The Dubai facility is a key component of a broader expansion strategy that also includes new data centers in Mexico, Japan, South Korea, and Malaysia. This major infrastructure push is a direct response to the explosive growth in artificial intelligence. “The speed of AI industry development has far exceeded our expectations, and the industry’s demand for AI infrastructure has also far exceeded our expectations,” stated Alibaba CEO Eddie Wu at the conference. This demand is reflected in the company’s performance, with Alibaba’s cloud services revenue growing by 26 percent year-on-year in the first quarter of 2025, driven largely by AI-related activities.
Strategic Partnership With Nvidia
In a related move to bolster its AI capabilities, Alibaba announced a partnership with Nvidia to develop advanced physical AI functionalities, including data synthesis, model training, and environmental simulation. However, the company has not yet confirmed whether the new global data centers, including the one in Dubai, will be equipped with Nvidia’s high-performance chips.
Navigating The US-China Tech Rivalry In The Gulf
Alibaba’s expansion into Dubai comes at a time of intense technological rivalry between the United States and China. Gulf nations have found themselves in a strategic tug-of-war, particularly concerning access to high-end semiconductor chips essential for AI development. The US has imposed restrictions on the flow of these advanced chips to the region over concerns about potential ties to China. While there have been some signs of easing these restrictions for the UAE, ongoing delays from Washington could create an opening for Chinese technology firms to step in and meet the region’s growing demand, making Alibaba’s new data center a significant development in the MENA tech landscape.
About Alibaba Cloud
Alibaba Cloud is the digital technology and intelligence backbone of Alibaba Group. It offers a comprehensive suite of cloud computing services to businesses worldwide, including elastic computing, database management, storage, network virtualization services, large-scale computing, security, and management and application services.
Source: AGBI
