Gulf states press ahead with AI buildout despite war

The Persian Gulf's wealthiest states are forging ahead with plans to build out massive artificial intelligence infrastructure, even as the US war with Iran has turned data centers into repeated military targets and disrupted the region.

State-backed firms in the United Arab Emirates have continued work on a sprawling AI campus in Abu Dhabi designed to deliver five gigawatts of computing capacity, adding measures to protect workers at the peak of the conflict, Bloomberg reported Friday. Saudi Arabia, meanwhile, has poured more than SR16 billion ($4.26 billion) into data center investment since the launch of Vision 2030, growing from just 60-plus operational facilities to a sector that now anchors the Kingdom's broader economic diversification strategy.bloomberg+2

A Trillion-Dollar Bet on AI Infrastructure

A new PwC Global Data Centre Outlook projects the Middle East will record the world's fastest growth in data center investment through 2050, potentially attracting $1.1 trillion in cumulative capital expenditure. Globally, data center spending is projected to reach $31.6 trillion over the same period, with the figure potentially climbing to $50 trillion if AI adoption accelerates beyond central forecasts.gdnonline+3

PwC attributed the Middle East's outsize growth rate partly to its low existing installed base and the ability of Gulf governments to compress development timelines by coordinating energy, capital and planning through centralized decision-making. Annual global data center capital expenditure is forecast to rise from roughly $800 billion in 2026 to $1.8 trillion by 2050.qz+1

Gulf States Scaling Up

The UAE's five-gigawatt campus, led by G42 in partnership with US technology firms, was unveiled in 2025 as the largest AI infrastructure project outside the United States. Its first 200-megawatt phase was expected to come online in 2026, according to Reuters. Bloomberg reported in April that G42 had been preparing to break ground on the project even as regional tensions escalated.reuters+2

Saudi Arabia's data center capacity has risen from 68 megawatts in 2021 to more than 467 megawatts in the first quarter of 2026, according to official Saudi data, while total investments in data centers and digital infrastructure have exceeded SR56.2 billion ($14.87 billion). Humain, the Kingdom's AI infrastructure arm, aims to develop 1.9 gigawatts of computing capacity by 2030 and 6.6 gigawatts by 2034, backed by an investment envelope of approximately $77 billion.arabnews+1

Risks Remain

The buildup is not without vulnerability. PwC warned that under a scenario involving tighter export controls on advanced semiconductors and retaliatory restrictions on critical raw materials, the Middle East would be the most proportionally exposed region, with cumulative capital expenditure falling 29 percent. The impact would be concentrated in Saudi Arabia, Qatar and the UAE, where planned capacity depends heavily on attracting internationally mobile AI workloads.arabnews+1

"Data centers are becoming the infrastructure that decides who competes in the AI economy," said Abir Harcha, senior technology analyst at Infomineo.arabnews