Microsoft and Abu Dhabi’s G42 are partnering to add 200 megawatts of data center capacity in the United Arab Emirates. The expansion is being delivered through Khazna Data Centers, a subsidiary of G42. The new facilities are equipped with advanced Nvidia AI chips following approval from the U.S. government.
This project supports Microsoft’s broader $15.2 billion multi-year investment plan in the region. The new infrastructure aims to boost sovereign cloud services, accelerate artificial intelligence adoption, and train one million people in digital skills by 2027.
UAE Gears Up its AI Infrastructure
The United Arab Emirates is aggressively building out its artificial intelligence infrastructure to support high-performance computing needs and accelerate national digital transformation. The country is expanding sovereign cloud networks, securing advanced hardware, and developing clean-powered data center capacity. Central to this ecosystem is the Dubai AI Campus, a purpose-built hub designed to host startups, tech enterprises, and research labs equipped with high-performance computing resources. By combining massive data center investments like the G42 and Microsoft initiative with dedicated innovation ecosystems such as the Dubai AI Campus, the UAE ensures local enterprises have direct access to the computing power needed to build, scale, and deploy next-generation AI technologies.
November 6, 2025
Microsoft and Abu Dhabi’s G42 announced a 200-megawatt data center expansion in the UAE. It is part of a more than $15 billion investment commitment by the US tech giant in the Gulf country. The expansion will be delivered through Khazna data centers, a unit of G42. Furthermore, it is expected to start coming online before the end of next year. The two firms noted this in a joint statement without providing further details. Microsoft said this week its investment in the UAE will reach $7.3 billion between 2023 and the end of this year. Moreover, there will be a further $7.9 billion earmarked for 2026-2029.
It also announced that US President Donald Trump’s administration had approved the export of advanced Nvidia chips for its data centers in the Gulf country. The country has been spending billions of dollars to become a global AI hub. Microsoft invested $1.5 billion last year to take a minority stake in G42, which is also backed by private equity firm Silver Lake. Furthermore, it was backed by Abu Dhabi sovereign wealth fund Mubadala and the family office of billionaire investor Ray Dalio. Microsoft is making advances in data centers as it constructs the world’s most powerful AI data center in Mount Pleasant in Wisconsin.
Project Factsheet
Significance:
- A 200-megawatt data center expansion to help drive UAE’s digital transformation efforts.
- Part of Microsoft’s wider $15 billion investment commitment in the Gulf region.
- Strengthens cloud, AI, and data infrastructure across the Middle East.
Infrastructure:
- Through Khazna Data Centers, a subsidiary of G42.
- Equipped with advanced Nvidia AI chips after the U.S. government approved their export.
- Facilities designed to meet Microsoft Azure’s global standards for secure, scalable, and sovereign cloud operations.
Developer/Consortium:
- Developed jointly by Microsoft Corporation and Abu Dhabi-based G42,
- G42 was backed by investors including Silver Lake, Mubadala Investment Company and the family office of Ray Dalio.
- Following a $1.5 billion investment made in 2024, Microsoft has a minority stake in G42.
Funding/Timeline:
- Estimated total investment: More than $15 billion in several phases.
- $7.3 billion allocated between 2023 and 2025 and a further $7.9 billion is planned for 2026–2029.
- Expected to begin phased operations before the end of next year.
Strategic Impact:
- Supports the UAE National Digital Economy Strategy aimed at doubling the digital sector’s GDP contribution within a decade.
- Creates new opportunities in AI, cloud computing, and digital skills training for local talent.
This positions the UAE as a major AI and data infrastructure hub in the region
Significance of Microsoft Data Center Expansion in UAE
Once complete, Microsoft datacenter expansion in UAE will provide additional world-class AI and cloud infrastructure. Furthermore, it strengthens Microsoft Azure’s secure, scalable and sovereign cloud services. This partnership also supports the UAE’s national digital economy strategy, which aims to double the digital economy’s contribution to GDP over the next decade. Furthermore, advanced GPUs and AI capabilities will empower public sector organizations. It will be regulated industries and enterprises to innovate, scale and operate with agility and resilience.
“Our partnership with Microsoft advances our mission to build the Intelligence Grid, the interconnected infrastructure for intelligence designed to empower people, industries and nations in the AI era. As a neocloud enterprise born in Abu Dhabi, G42 is advancing systems that are sovereign, secure and open to global collaboration, keeping technology human by design,” said Peng Xiao, group CEO of G42. Aligned with Microsoft’s commitment to skill one million people in the UAE by 2027, this expansion unlocks new opportunities for local talent in AI, cloud and digital services.
Leave a Reply