As the world becomes increasingly interconnected, the rapid adoption of AI-driven digitization has significantly boosted the demand for data centers. The UAE, with its ambitious vision to achieve global leadership in AI through substantial investments, is fully embracing this global trend. By 2029, the UAE’s data center colocation market is projected to reach USD 650 million, growing at a robust CAGR of 14%.
Within the data center industry, the colocation data center model has become crucial in driving digital transformation, supporting AI workloads, and enabling cloud-based solutions. It plays a significant role by bridging the gap between owning dedicated IT infrastructure and fully outsourcing operations. It allows businesses to retain control over their hardware while benefiting from cost savings, advanced connectivity, and the expertise of specialized facilities. The UAE has more than 30 colocation data centers, most of which are being developed according to Tier III standards. As per the latest reports, Khazna Data Centers holds the largest market share with over 74 percent in the UAE, with a power capacity of 204 MW.
The country has implemented data residency laws and compliance standards, promoting local data hosting and driving demand for local data centers. Coupled with strong support for renewable energy adoption, these measures make the UAE an attractive destination for global and regional data center operators seeking sustainable and energy-efficient solutions. Furthermore, favorable government policies, frameworks, and initiatives have significantly boosted foreign investments in the sector.
As a result of these concerted efforts, the UAE’s cloud and data center industry has transformed into a robust ecosystem. It now supports global hyperscalers, cloud service providers, and enterprise workloads, underscoring its role as a key player in the region’s digital transformation. Recognizing this remarkable progress, the Jury at International Business Magazine has announced three award categories for 2024: Best Data Hosting Solutions Provider UAE, Leading Wholesale Data Center Provider UAE, and Best Data Center Infrastructure Operations UAE.
These award categories were created to honor the top-performing data center companies that provide secure, reliable, and uninterrupted services. The “Best Data Hosting Solutions Provider” award recognized nominees with exceptional auto-scaling capabilities for on-demand resource allocation and strong customer support systems. For the “Leading Wholesale Data Center Provider” award, the jury evaluated factors like network infrastructure, operational standards, competitive pricing, and the integration of advanced technologies.
The “Best Data Center Infrastructure Operations” award was given to data centers that maximize productivity while minimizing energy use, downtime, and waste. The jury assessed nominees for their track record of uptime performance and investments in modular, scalable infrastructure. Across all three categories, extra emphasis was placed on energy efficiency, including the use of renewable energy, robust cybersecurity strategies, and the application of advanced technologies like AI and ML.
With its state-of-the-art facilities and strong operational record in the UAE, Khazna was recognized as the winner of all three categories at the International Business Magazine Awards 2024.
Making UAE the new Global Technology Hub
Khazna is a state-directed initiative from almost a decade ago. It was founded by Mubadala Investment Company to create an infrastructure that can support the UAE in its digital transformation journey, and originally provided infrastructure support to the UAE’s telecom operators and key government entities. Today, Khazna stands as a leading wholesale operator, offering enterprises and government agencies the unique flexibility to manage and secure their dedicated space, ensuring full control without the need for shared environments like those found with other colocation providers.
Once the telecom operators established an ecosystem with Khazna, they expanded to offer shared or colocation solutions to the enterprise market. This model, today, has changed, with the entry of the cloud players and the advancement in AI technology. When enterprises started realizing the benefits of operational efficiencies through the adoption of cloud technology, Khazna became the preferred choice for many of the incumbent IT leaders and startups. Currently, Khazna stands as the most trusted partner for global companies in the UAE, offering a full suite of cloud services.
With the involvement of G42, Khazna has evolved from designing specifically for the cloud layer to now meeting the requirements of AI infrastructure within the data center space. G42 is the largest Emirati AI technology company, which has developed multiple large language models (LLMs) including the first Arabic LLM with more than 30 billion parameters. Following a joint-venture partnership between G42 and e& (Etisalat), Khazna became the largest data center operator in the MEA region from a capacity perspective. It now holds over 74 percent of the UAE market share.
Khazna has 24 operational data centers servicing enterprise businesses, with an additional 7 in development, and a total customer contracted capacity of 301 MW. With more than 204MW currently active, operational, and handed over to clients, Khazna is on track to complete the handover of the remaining capacity by next year. Additionally, the company has secured another 250MW as part of its ongoing capacity expansion. In February this year, Khazna launched its AUH6 facility, and recently announced the construction of its largest data center in the UAE to date. The 100MW data center will be situated in Ajman and is an AI-optimized data center – the first of its kind in the region.
G42, in partnership with Microsoft and OpenAI, are co-developing LLMs that help certain sectors like banking, financial institutions, investment sectors and oil and gas in the Arabic- speaking regions. The AI system has been trained in the Arabic language by accessing Arabic libraries, books, and encyclopedias. This led to the development of Jais, an Arabic LLM with over 30 billion parameters. With the integration of the Jais model into Azure Cloud, Khazna’s infrastructure is perfectly aligned with the needs of G42 and advanced LLMs like Jais.
Engineering a Sustainable Growth
On the sustainability front, Khazna’s AUH6 facility is a cornerstone of its Future First Strategy, which emphasizes innovation, sustainability, and resilience. AUH6 was designed using a modular approach, integrating advanced cooling systems and energy management technologies – both of which are essential for sustainability and energy efficiency. The modular approach offers a future-proof solution that can adapt to emerging technologies and client needs, ensuring long-term relevance and operational excellence.
The exterior design of AUH6 was engineered to shield the structure from the harsh impact of direct sunlight. This design approach effectively mitigates heat ingress into the building, further enhancing the data center’s efficiency and sustainability. The AUH6 facility meets LEED gold, as well as Pearl 4 under the UAE’s own Estidama sustainable building rating system. This dual recognition underscores Khazna’s leadership in developing green data centers that align with both international benchmarks and the UAE’s vision for a sustainable future.
Committed to achieving its future sustainability goals, Khazna is also implementing other measures to reduce the environmental impacts of its data centers. These include focusing on zero waste and responsible water management as well as investing in renewable energy and pioneering cooling technologies.
