Microsoft and Abu Dhabi–based technology group G42 are set to expand the United Arab Emirates’ data center capacity by 200 megawatts, a move tied to Microsoft’s broader $15.2 billion investment in the country. The new capacity will be delivered through Khazna Data Centers, a G42 subsidiary, with operations expected to begin before the end of 2026.
The expansion reflects a growing collaboration between the two companies aimed at supporting the UAE’s digital economy strategy, which seeks to double the sector’s share of GDP over the next decade. Rather than focusing solely on physical infrastructure, the initiative is designed to strengthen the country’s capabilities in artificial intelligence, cloud computing, and cybersecurity. The facilities will host advanced GPUs and AI systems to support government agencies, regulated industries, and enterprises that are increasingly dependent on large-scale data processing and cloud-based services.
Microsoft and G42 describe their partnership as rooted in principles of responsible technology use, emphasizing data protection and ethical AI governance. The Responsible AI Future Foundation—jointly launched by Microsoft, G42, and the Mohamed bin Zayed University of Artificial Intelligence—continues to serve as a platform for developing and monitoring responsible AI standards globally.
Part of Microsoft’s broader regional plan includes training one million people in the UAE by 2027 in AI, digital, and cloud-related skills. The company has already opened the Global Engineering Development Center and the AI for Good Lab in Abu Dhabi in collaboration with G42 and local educational institutions. These initiatives are intended to strengthen the local talent pipeline and provide UAE nationals with more opportunities in the technology sector.
Microsoft President Brad Smith characterized the expansion as an investment in the country’s technological foundation, highlighting the combination of Microsoft’s global infrastructure experience with G42’s regional expertise. G42’s CEO Peng Xiao framed it as part of the company’s broader goal to develop an “Intelligence Grid,” an integrated digital ecosystem supporting AI-driven innovation across industries while maintaining data sovereignty and openness to international cooperation.
The planned data center growth marks another step in the UAE’s bid to become a regional hub for digital services and AI research. For both companies, the partnership reinforces their roles in shaping the Gulf’s emerging cloud infrastructure and data governance landscape, amid a global race to localize AI capacity and cloud services closer to national markets.
