Microsoft and UAE’s G42 Announce Major Data Center Expansion to Accelerate AI and Cloud Growth
- ByStartupStory | November 6, 2025
Microsoft Corporation and Abu Dhabi-based artificial intelligence powerhouse G42 have jointly announced a significant 200-megawatt (MW) expansion of data center capacity in the United Arab Emirates (UAE). This expansion, to be delivered through Khazna Data Centers—a G42 subsidiary—is part of Microsoft’s broader $15.2 billion investment plan in the UAE, aiming to power the country’s rapidly growing AI and cloud infrastructure needs.
The new facilities, expected to be operational before the end of 2026, will enhance Microsoft Azure’s secure, scalable, and sovereign cloud services in the region. Equipped with advanced GPUs and AI capabilities, the expanded infrastructure will enable public sector organizations, regulated industries, and enterprises across the UAE to innovate and scale their operations with agility and resilience.
This strategic partnership underlines the UAE’s ambition to become a global hub for artificial intelligence, doubling its digital economy’s contribution to GDP within the next decade. Microsoft’s investment also encompasses talent development programs focusing on skilling one million people in the UAE by 2027, alongside establishing innovation centers like the Global Engineering Development Center and the AI for Good Lab in Abu Dhabi.
Brad Smith, Vice Chair and President of Microsoft, emphasized, “This expansion is more than data centers. It’s about powering the UAE’s future. By combining Microsoft’s global expertise with G42’s local leadership, we’re laying the foundation for innovation that will bring new opportunities to people across the country.”
Peng Xiao, Group CEO of G42, added, “Our partnership with Microsoft advances our mission to build the Intelligence Grid—an interconnected infrastructure designed to empower people, industries, and nations in the AI era. As a neocloud enterprise born in Abu Dhabi, G42 is advancing systems that are sovereign, secure, and open to global collaboration.”
The expanded data center capacity also complements the previously announced Stargate UAE AI infrastructure cluster, further solidifying the UAE’s position at the forefront of AI development globally.
In summary, Microsoft and G42’s planned 200 MW data center expansion marks a critical step in the UAE’s digital transformation journey, combining cutting-edge technology, strategic investment, and workforce development to boost the nation’s AI and cloud capabilities for years to come.
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