From Dubai to Dammam and Cairo - How Economic Visions, AI and the Cloud are Transforming the Arab World’s Data Center Opportunity
This report on the Arab world's commercial data center colocation opportunity. Data centers have become vital pillars of the Middle East’s transition to more diverse, digitally-anchored and oil-independent economies. Despite mounting geopolitical uncertainty, this analysis says the region still offers one of the most extraordinary digital infrastructure investment opportunity in the Global South.
Data centers have become vital pillars of MENA’s transition to more diverse, digitally-anchored and oil-independent economies. Over the 2021-2023 three-year period, nearly 40 new commercial facilities have come live in MENA, nearly doubling the region’s live IT load, on the back of extensive submarine cable buildout, explosive Internet data traffic and increased cloud adoption.
In true Middle Eastern form, the region’s stated ambitions are eye-popping. Taking announcements and other plans at face value, MENA data center projects would unleash upwards of 2500MW of IT load capacity across the region over the next decade.
Key highlights from the report:
- On demand vs. supply: MENA markets offer some of the world’s best supply and demand fundamentals for expanded commercial colocation services.
- On the scale of the MENA colo opportunity: a $3trn GDP. 300m broadband connections. 70+ submarine cables. 200 content, CDN and cloud core and edge PoPs. $7bn in projected cumulative commercial colo CapEx. 20% USD revenue growth.
- On oversupply risk: The analyst doesn't see it. The analysis suggests that most MENA markets are undersupplied relative to their medium to long-term demand potential.
- On the AI impact: GCC countries are a prime potential destination for the offshoring of AI model training.
- On the impact of the war in Gaza: this is the biggest risk to the short-term forecasts. The analyst sees a triple fallout - on demand, construction and investment. But they do not expect the increased uncertainty to fundamentally alter the long-term projections for the region’s commercial data center market.
