Microsoft and G42 announced a large expansion of data centre capacity in the UAE, adding 200 megawatts through Khazna Data Centers, which is a G42 subsidiary. They said this is under Microsoft’s overall spending plan in the country and is expected to start coming online before the end of 2026. Both companies described the project as tied to the UAE’s digital economy plans, which aim to increase the digital sector’s share of GDP over the next decade.
The announcement was presented as an extension of a partnership that began more than two years ago, during which Microsoft and G42 have worked on AI projects backed by the governments of the United States and the UAE. This new data centre capacity is positioned as one element of Microsoft’s ongoing investment programme, which the company says amounts to $15.2 billion between 2023 and 2029.
Microsoft said the additional capacity will support Azure services in the country and allow public bodies, regulated fields and private companies to run more AI and cloud applications. It also links the expansion to earlier joint work such as research labs and the Responsible AI Future Foundation, which was launched with MBZUAI.
The growth of data centres is described as part of a wider week of technology announcements taking place in Abu Dhabi and Dubai, where annual forums are underway.
How Much Money Is Being Spent And Where Is It Allocated?
Microsoft set out full spending figures for its UAE work. The company said it will spend $15.2 billion from 2023 to 2029, and said this money is being spent within the UAE rather than raised there.
Between 2023 and the end of this year, Microsoft said spending will reach just over $7.3 billion. This includes a $1.5 billion equity investment in G42, more than $4.6 billion directed toward AI and cloud data centres, and more than $1.2 billion in operating costs.
From 2026 to 2029, Microsoft expects spending to reach more than $7.9 billion. It said more than $5.5 billion of this will go toward ongoing and future data centre projects, with almost $2.4 billion allocated to operating costs.
Microsoft also detailed the volume of technology it has shipped to the UAE under export licences from the United States. The company said the country now holds the equivalent of 21,500 Nvidia A100 GPUs based on A100, H100 and H200 chips. A licence approved in September allows shipments equal to 60,400 more A100-level chips through Nvidia’s GB300 line. These chips support AI models from OpenAI, Anthropic, open source groups and Microsoft.
The company referred to its AI Diffusion Report which ranks the UAE as the highest in the world for per capita use of generative AI at 59.4%.
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How Are Talent Projects Being Used Alongside The Data Centre Expansion?
Microsoft placed equal emphasis on skills and staff in the UAE. The company said it has nearly one thousand employees in the country across forty nationalities, with almost one hundred working as engineers. It also said the Emirati partner network has grown close to threefold in two years, now covering one thousand four hundred firms that employ nearly forty five thousand people.
The Global Engineering Development Center in Abu Dhabi opened this year and works on new products and local support for AI and cloud systems. Microsoft said it expects engineering teams to grow further and may put more attention on field specific models.
The AI for Good Lab also operates in Abu Dhabi. Microsoft said researchers there work on language models for countries such as Malawi, Tanzania, Kenya, Uganda and the Democratic Republic of the Congo, supported through Azure compute grants.
The company repeated its pledge from last November to train one million people in the UAE before the end of 2027. It said recent work at GITEX launched training for one hundred twenty thousand government staff and will cover one hundred seventy five thousand students and thirty nine thousand teachers through partnerships with GEMS, ADEK and KHDA.
What Work Has Been Done On Trust And Agreements Between Nations?
The Responsible AI Future Foundation, set up earlier this year through Microsoft, G42 and MBZUAI, is presented as an effort to shape ethical standards for AI across the Middle East and parts of the Global South.
The first Abu Dhabi Global AI Summit also took place this week, hosted by G42, Microsoft, the foundation and GZERO Media. The organisers brought government ministers and private sector figures together to discuss access to AI across lower income regions.
Microsoft and G42 also created the Intergovernmental Assurance Agreement. The framework was drafted with input from United States and UAE officials, as well as members of both political parties in the United States Congress. It sets conditions for cybersecurity, export controls, data protection and Know Your Customer checks. Microsoft said it has built a compliance system to handle those requirements.
A delegation from Seattle also travelled to Abu Dhabi for meetings on education, medical research, economic development and community work. The visit was described as an attempt to build stronger people-to-people ties alongside the corporate and government agreements tied to the data centre expansion and the broader investment programme.
