The Middle East Data Center market is experiencing an unprecedented boom, leading to an increase in construction of new facilities to keep up with the high demand. A recent research report by ResearchandMarkets.com says that the Middle East Data Center Construction Market was valued at US$ 2.35 Billion in 2023, and is expected to reach US$ 4.39 Billion by 2029, growing at a Compounded Average Growth Rate (CAGR) of 10.98 percent.
This is significant given the data center boom in countries like the United Arab Emirates (UAE), Kingdom of Saudi Arabia (KSA) and other emerging markets such as Oman, Qatar and Bahrain, in the region. Gulf Data Hub, Khazna Data Centers, Edgenex Data Centers by DAMAC and Ooredoo are some of the homegrown companies that have established themselves as formidable players in the market.
According to the report, titled Middle East Data Center Construction Industry – Outlook & Forecast 2024-2029, the developments in the market will be driven by the exponential growth of emerging technologies such as Artificial Intelligence (AI). It says, “Almost every country in the region has an AI committee launching national AI strategies to promote its development and upskill its workforce, creating better technology and employment opportunities for its citizens.” It further says, “Data centers are aiding AI via high-performance computing (HPC), data storage, networking, and hosting specialized hardware. The UAE and Saudi Arabia lead on this front, using AI to control the power grid and distribution.”
The report also credits an increase in the demand for creating facilities powered by sustainable sources as one of the key reasons for the increased demand in construction of new facilities. “The UAE, Saudi Arabia, Israel, Kuwait, Oman, and others are starting to use renewable energy sources such as solar, wind, and bioenergy for their facilities’ power needs. Implementing air-based cooling techniques is also rising to curtail water consumption further.” A lot of these sustainability friendly technologies also require data centers to be constructed differently to enable specialised equipment to be installed.
The report also touches upon the role of smart cities in propelling the demand for construction of data centers. “UAE’s Dubai and Abu Dhabi are among the world’s smartest cities, with a global smart city index ranking of 17 and 13, respectively,” says the report that also mentions the upcoming NEOM in Saudi Arabia.
