Microsoft and G42 Announce 200MW Data Center Expansion in UAE, On Top of 15.2 Billion Investment

Microsoft and G42 made headlines by announcing a landmark 200-megawatt (MW) expansion of datacenter capacity in the United Arab Emirates, further cementing the region’s status as the epicenter of AI and cloud innovation in the Middle East. This colossal infrastructure project is underpinned by Microsoft’s ongoing $15.2 billion investment program in the UAE and signifies a bold leap in their strategic partnership with G42, Abu Dhabi’s international neocloud provider. The new datacenter capacity, delivered via Khazna Data Centers—a G42 subsidiary—is expected to come online by the close of 2026, marking a transformative moment for UAE’s digital economy and the broader regional landscape.​

Strategic Partnership for Digital Transformation

This expansion is far more than a technical upgrade; it’s a catalyst for the UAE’s national digital transformation strategy, which aims to double the digital economy’s contribution to national GDP over the next decade. The partnership between Microsoft and G42 is built on values of trust and responsible innovation, with both organizations focused on the highest standards of cybersecurity, data protection, and ethical AI development. The recently launched Responsible AI Future Foundation, a joint effort involving Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), sets a global benchmark for responsible AI governance and policy leadership.​

Unmatched Investment and Infrastructure

Microsoft and G42’s investment is historic. By the end of 2025, Microsoft’s cumulative investment in the UAE will reach $7.3 billion, with an additional $7.9 billion earmarked for the years 2026 to 2029. The project will be executed by Khazna Data Centers, enhancing UAE’s capacity to offer world-class, scalable, sovereign, and secure cloud services through Microsoft Azure. This robust infrastructure forms the backbone for advanced AI capabilities, including the deployment of next-gen GPUs essential for powering demanding workloads in public sector agencies, regulated industries, and agile enterprises.​

Microsoft also secured export licenses from the U.S. government for leading-edge Nvidia AI chips, positioning the UAE as a global leader in artificial intelligence hardware deployment.​

Empowering Talent and Skills Development

Aligned with Microsoft’s ambitious goal to skill one million UAE residents in digital technology by 2027, this expansion will unlock substantial opportunities for local talent across AI, cloud, and tech services fields. Concrete initiatives already in motion include the Global Engineering Development Center and the AI for Good Lab in Abu Dhabi, both of which actively drive education and career growth in partnership with government, academia, and industry stakeholders. G42 and Microsoft’s focus on inclusive access is designed to fast-track the development of the next generation of technology leaders, promoting sustainable growth and expanding the digital skills base in the region.​

Leadership Comments: Vision, Trust, and Innovation

Brad Smith, Vice Chair and President of Microsoft, emphasized:
“This expansion is more than datacenters. It’s about powering the UAE’s future. By combining Microsoft’s global expertise with G42’s local leadership and broadening role as an international neocloud enterprise, we’re building the foundation for innovation that will bring new opportunities to people across the country.”​

Peng Xiao, Group CEO of G42, stated:
“Our partnership with Microsoft advances our mission to build the Intelligence Grid, the interconnected infrastructure for intelligence 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, keeping technology human by design.”​

Ethics, Cybersecurity, and Responsible AI

At the center of this partnership lies an unwavering commitment to responsible technology deployment. The Responsible AI Future Foundation, jointly advanced by Microsoft, G42, and MBZUAI, aims to position the UAE as a leader in AI ethics and governance, setting standards for cybersecurity and data sovereignty across the region and globally. This approach ensures that technological progress aligns with the principles of transparency, public trust, and human-centric ethical frameworks.​

Accelerating the UAE’s Digital Economy

With this expansion, the UAE takes a major step toward realizing its vision of doubling the digital economy’s GDP contribution within the coming decade. The new Microsoft-G42 datacenter infrastructure delivers resilient, secure, and scalable resources for local companies, governments, and research institutions, enabling rapid growth in cloud-powered AI solutions, digital services, and transformational applications.​

Joint Ecosystem Growth and Regional Impact

This announcement builds on a series of recent joint efforts between the two companies, integrating the launch of the Responsible AI Foundation and the creation of AI innovation hubs in Abu Dhabi. Together, Microsoft and G42 are constructing the digital backbone for a future era focused on trust, technological excellence, and inclusive, broad-based economic growth.

The $15.2 billion partnership and data center expansion between Microsoft and G42 represent a defining moment for the UAE’s technology landscape and regional ambitions. As new datacenter capacities come online, the effects will ripple across sectors, enabling innovation, securing digital assets, and nurturing the next generation of AI talent. A future defined by trust, responsible growth, and the promise of cutting-edge technology is being built now—empowering the UAE to lead the charge in AI and cloud adoption for years to come.​