nisar ahmed 
Dubai: While the UAE’s AI ambitions often make headlines, the foundation powering this digital revolution has been built by a company most people have never heard of: Khazna Data Centers.
The Dubai-headquartered firm, a specialized real estate developer of digital infrastructure, now controls more than 70% of the UAE’s data center capacity. Once a modest operation with only 2 megawatts of capacity in 2014 — enough to power about 1,600 homes — Khazna today runs facilities capable of supporting 200,000 households. These centers host the servers of global giants including Google, Amazon, and Microsoft, making Khazna the invisible backbone of the country’s trillion-dollar digital economy.
From Warehouses to AI Factories
Khazna’s business is simple yet essential: building and leasing the digital warehouses that power cloud computing, streaming, and generative AI. Its sites provide the electricity, cooling systems, and security needed to keep everything from Netflix streams to ChatGPT responses online across the region.
Recent projects underscore Khazna’s AI-first strategy. These include a 32-megawatt facility in Abu Dhabi’s Masdar City and a 100-megawatt campus in Ajman, designed specifically for the graphics processing units (GPUs) that drive artificial intelligence. GPUs generate massive amounts of heat, forcing operators to move beyond traditional air conditioning.
“The shift to extremely powerful GPUs packed into compact spaces has created major cooling challenges,” said Johan Nilerud, Khazna’s Chief Operating Officer. “Our Ajman site uses closed-loop liquid cooling and chip-to-chip systems, reducing energy use while maximizing performance.”
A Government-Backed Digital Vision
Khazna’s rise was fueled by a government mandate to build a national digital infrastructure, aligning with the UAE’s push to diversify its economy beyond hydrocarbons.
Its parent company, G42, chaired by Sheikh Tahnoun bin Zayed Al Nahyan, has partnered with global technology leaders including Nvidia. Leveraging these relationships, Khazna is now deploying Nvidia-certified AI factories, reinforcing the UAE’s ambition to become a hub for advanced computing.
“We view data centers as the foundational infrastructure for the future economy,” said Hassan Al Naqbi, CEO of Khazna. “Our vision is to be a trusted partner for that foundation — not just in the Middle East, but globally.”
Expansion Beyond the Gulf
Khazna’s ambitions are not limited to the UAE. The company is building new facilities in Turkey and Saudi Arabia while eyeing sites in France and Italy. In Ankara, Khazna’s upcoming facility will address both local enterprise needs and Turkey’s broader data sovereignty goals.
Each project is designed with scalability in mind. “If you wait two years, you risk building something already outdated by chip technology,” Al Naqbi explained, stressing the need for speed in construction as AI workloads accelerate.
Khazna also favors partnerships with local firms when expanding internationally. “We don’t aim to be the dominant player,” said Nilerud. “Our role is to bring technical expertise and operational excellence to complement what’s already underway.”
Leapfrogging the West
Executives argue that Western markets often underestimate Middle Eastern digital capabilities. Global providers such as Google Cloud, Amazon Web Services, and Microsoft Azure were drawn to the UAE not only for its regulatory environment but also for reduced latency in serving regional users.
“A common misconception is that the Middle East trails in digital infrastructure,” Al Naqbi said. “In fact, the UAE and Saudi Arabia are leapfrogging legacy systems.”
Market trends support this outlook. Cloud infrastructure spending in the UAE is projected to grow 11% annually through 2029, while localized data center demand in banking and healthcare continues to rise due to regulatory requirements.
Sustainability and Challenges
Yet, growth comes with challenges. Supply chain constraints for GPUs, a shortage of skilled professionals, and sustainability pressures all weigh on the industry. Cooling massive data halls in desert climates requires innovation, particularly as water use and energy efficiency face greater scrutiny.
Khazna is investing in solar power and biofuels to align with the UAE’s Net Zero by 2050 strategy. But regional experts warn that environmental conditions and geopolitical risks remain hurdles for long-term planning.
“Operating advanced facilities in such a climate while meeting sustainability goals is complex,” said Victoria Mendes, research manager at IDC for the Middle East, Turkey, and Africa.
The Economic Stakes
The impact of Khazna’s work extends far beyond technology. The UAE’s National Digital Economy Strategy aims to raise the non-oil share of GDP to over 20% by 2031, with data centers seen as the foundation of this transition.
“Much like world-class airports powered the UAE’s tourism boom, data centers will power its digital economy,” said Bjorn Viedge, general manager at Alec Data Center Solutions.
For Khazna, the mission is clear: keep building at speed and scale to ensure the UAE’s AI ambitions are not just bold rhetoric, but grounded in world-class infrastructure.
