Middle East Has a Competitive Advantage as a Data Center Powerhouse, Says BCG
Benefiting from its 2,000-mile radius geographical characteristic, which encompasses over 3 billion people, the region is strategically positioned to serve Europe, Asia, Africa, and the Global South with non-latency-sensitive AI inference at scale.
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[Image source: Krishna Prasad/MITSMR Middle East]
With major investments, partnerships, and policies, the Middle East has positioned itself as an emerging global hub for data center investment and innovations, finds Boston Consulting Group (BCG)’s latest report, ‘AI Data Centers: An Opportunity in the Middle East’.
With data center demand projected to grow from 86 GW in 2025 to 198 GW by 2030, the report highlights the region’s integral role. Benefiting from its 2,000-mile radius geographical characteristic, which encompasses over 3 billion people, the region is strategically positioned to serve Europe, Asia, Africa, and the Global South with non-latency-sensitive AI inference at scale.
One of the competitive advantages it offers is cost structuring, which sees up to 50% lower leasing rates, low power tariffs, and advanced cooling systems. Adopted by regional operators, it significantly reduces the total cost of ownership.
“The Middle East is undergoing a pivotal transformation as it positions itself to become a global hub for AI infrastructure. With strategic investments, progressive digital policies, and ambitious national visions across Qatar, the UAE, and Saudi Arabia, the region is building the foundation for scalable, next-generation AI compute,” said Thibault Werlé, managing director and partner, BCG.
Markets such as the UAE and Saudi Arabia have emerged as the leading players by fast-tracking development, dedicating investment teams, and developing special economic zone clusters such as Masdar City’s Stargate Campus, becoming a go-to for global data center ambitions.
This momentum is supported by land availability, scalable power, and the planned ~720 Tbps FIG submarine cable.
Qatar, following the neighbours’ footsteps, is steadily strengthening its position as a competitive player in the global AI and technology race, supported by strategic investments from the Qatar Investment Authority (QIA) in the form of a $3 billion global platform with Blue Owl Capital and its participation in Anthropic’s $13 billion funding round. These initiatives advance Qatar’s digital capabilities, aligning with Qatar Digital Vision 2030.
“Qatar’s digital ambition is rapidly taking shape, driven by decisive leadership and a deep commitment to innovation. In line with Qatar National Vision 2030 and Qatar’s Third National Development Strategy, the country is harnessing AI and emerging technologies to cement its role as a competitive force in the global digital economy,” said Harold Haddad, managing director and senior partner, BCG.
