GCC Data Centre Boom: $120bn Project Pipeline Signals the Region's Next Mega-Sector

The Gulf's data centre market has moved from niche to mega-sector, with $9bn awarded in just two years and a $120bn pipeline ahead — driven by AI demand, cheap power and sovereign data laws.

The GCC data centre construction market is entering its steepest growth phase yet. According to analysis presented by MEED (ME Global Data), some $15.7bn worth of data centre contracts have been awarded across the region over the past decade — but nearly $9bn of that landed in the last two years alone. The real story, however, is what's coming: a project pipeline now valued at roughly $120bn, with around $60bn in design and a further $58–59bn under study.

AI is rewriting the region's infrastructure agenda

The surge is powered by a convergence of forces. Internet traffic across Arab nations has grown at a 34% compound annual rate — well above the 22% global average — while governments have placed AI at the centre of their national visions. Saudi Arabia and the UAE have each declared ambitions to become the world's third data centre powerhouse behind the US and China, and both offer what hyperscalers need most: abundant land, low-cost power and world-class solar resources. Sovereign data laws requiring information to be stored in-country have added further momentum.

Cost is another regional advantage. Building a data centre runs about $11.3 per watt in Saudi Arabia and $9.25 in the UAE, comfortably below Singapore ($15.1) and Tokyo ($14.5) — although prices have climbed from $10.8 and $8.8 respectively in 2024 as demand for equipment tightens supply chains.

The flagship projects

Leading the wave is Stargate UAE in Abu Dhabi, the region's largest data centre under construction and among the biggest globally. Developed by G42 with OpenAI — alongside Nvidia, Cisco, SoftBank and Oracle — the project's first 200MW phase, built by ALEC, is the opening stage of a planned 5GW AI campus born of the US–UAE AI Acceleration Agreement.

In Saudi Arabia, the recently announced Hexagon data centre will be one of the world's largest: a 480MW, Tier 4 government-owned facility covering 30 million sq ft with an investment of about $2.7bn. Amazon Web Services has completed two availability-zone facilities near Riyadh with a third under construction, while Khazna is delivering the region's first AI-focused data centre — a 100MW, 20-hall facility in Ajman.

Looking further ahead, PIF-backed Humain tops the future pipeline with some $47bn in planned projects, followed by DataVolt ($8.2bn), AWS ($4.3bn), Blackstone ($3bn) and Nvidia ($2.5bn), including a $5bn, 500MW Nvidia–Humain venture in Saudi Arabia.

A private-sector-led market — with room for new entrants

Unusually for the Gulf projects market, data centres are being driven by private and quasi-government players rather than ministries. Construction, meanwhile, remains concentrated among a handful of specialist contractors — ALEC, Laing O'Rourke, JLW and McLaren among them — and projects are rarely tendered publicly, making pre-qualification with developers essential for firms seeking entry.

Industry sentiment reflects the opportunity. With a forecast of 70–80% growth in project activity over the next five to ten years, the Gulf's data centre boom looks less like a spike — and more like the start of a new infrastructure era.

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