TLDR
- Microsoft and Abu Dhabi’s G42 are adding 200 megawatts of data center capacity in the UAE through Khazna Data Centers
- New facilities expected operational before end of 2026 as part of Microsoft’s $15 billion+ UAE investment plan
- Microsoft investing $7.3 billion through 2025, with $7.9 billion more allocated for 2026-2029
- Trump administration approved exports of advanced Nvidia chips for the UAE data center operations
- Microsoft took $1.5 billion minority stake in G42 last year alongside investors including Silver Lake and Mubadala
Microsoft dropped news on Wednesday about a major infrastructure move in the Middle East. The company is teaming up with Abu Dhabi’s G42 to expand data center capacity in the United Arab Emirates by 200 megawatts.
The expansion comes through G42’s subsidiary, Khazna Data Centers. The companies said the new capacity should start coming online before the end of 2026.
This isn’t a small side project. Microsoft is pouring serious money into the region with a commitment exceeding $15 billion total.
The tech giant laid out the spending timeline earlier this week. Between 2023 and the end of 2025, Microsoft will invest $7.3 billion in the UAE.
Looking ahead, another $7.9 billion is slated for 2026 through 2029. That puts the full commitment north of $15 billion.
Chip Export Approval Clears Path Forward
Microsoft got a green light from the Trump administration on something critical. The government approved exports of advanced Nvidia chips to the UAE data centers.
That approval matters because these chips power the AI infrastructure Microsoft is building. The UAE has been making a push to become a global AI center, spending billions on the effort.
Microsoft bought into G42 last year with a $1.5 billion investment. That gave the company a minority stake in the Abu Dhabi firm.
G42 has solid backing beyond Microsoft. Silver Lake, the private equity firm, is an investor along with Abu Dhabi’s sovereign wealth fund Mubadala.
Billionaire investor Ray Dalio’s family office also has skin in the game.
Azure Gets Middle East Boost
The expanded infrastructure will beef up Microsoft Azure’s capabilities in the region. The companies said the project brings more AI and cloud resources to the UAE.
They’re positioning the services as secure, scalable, and sovereign. That last word is key for addressing data sovereignty concerns that come up in cloud computing.
Where data lives matters for regulatory compliance. Local data centers help Microsoft meet those requirements.
To put 200 megawatts in perspective, a large hyperscale data center typically runs on 30 to 50 megawatts. This is a substantial capacity addition.
The UAE and broader Gulf region have become increasingly important in the tech world. Local governments are backing major investments in digital infrastructure.
Microsoft’s partnership with G42 provides local knowledge and connections. G42 has strong ties to Abu Dhabi’s government and business networks.
The companies expect the new 200-megawatt capacity to begin operations before the end of 2026. Microsoft’s UAE spending will hit $7.3 billion by year-end 2025.
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