The UAE is driving the rapid adoption of technologies like artificial intelligence (AI), big data, and cloud computing. As a result, the demand for data centres in the region has grown significantly. These facilities, which house critical computing and storage infrastructure, are essential for managing the increasing volume of data generated by businesses, governments, and individuals.

Data centres facilities store, process, and manage large volumes of data. Equipped with advanced computing hardware, cooling systems, and power supplies, these centres ensure the seamless operation of digital applications and services. Functions within data centres include high-performance computing (HPC) to support intensive workloads, liquid cooling systems for efficiency, and server management for secure and scalable operations.

AI and Business Driving Data Centre Growth

The use of AI technologies across sectors, from healthcare to finance, is a major contributor to the strain on existing data centre capacity. Businesses are increasingly relying on AI tools such as virtual assistants and personalised content creators (Chat GPT) which means in order to keep pace with this growth, the UAE is rapidly expanding its data centre capabilities.

There are several notable data centers in Dubai and Abu Dhabi, but it is only a recent development to see data centre expansion being specifically focused on AI.

One example of this expansion is the 100MW Khazna AI Data Centre in Ajman, set to be operational by Q3 2025. As one of the largest developments of its kind in the UAE, the Ajman data centre will support AI and other data intensive applications.

The UAE’s regulatory landscape offers unique opportunities for businesses to expand their IT and data centre operations. For instance, in free zones like the Khalifa Industrial Zone Abu Dhabi (KIZAD), certain IT and computer system software activities remain unregulated, presenting an attractive proposition for companies looking to establish or scale their data operations. Companies can leverage this regulatory flexibility to develop innovative solutions, integrate advanced cooling technologies, and provide specialised IT services.

Large Warehouses for Data Centres

Data centres require significant physical space to house servers, cooling systems, and other infrastructure, making large warehousing free zones and mainland areas attractive and necessary for expansion.

Dubai International Financial Centre (DIFC) offers four ready to move in datacentres providing secure, resilient, and advanced ICT infrastructure tailored to the dynamic needs of its financial and business community.

Other free zones like KIZAD and Dubai Industrial City offer vast spaces that can accommodate the physical growth of data centres. These areas not only provide room for infrastructure but also offer logistical advantages, such as proximity to transportation hubs and streamlined business setup processes. By utilizing these zones, companies can establish scalable data centre facilities that cater to the growing demand for digital services.

Advanced Cooling for Data Centres

One key area of innovation in data centres is the adoption of advanced cooling technologies. liquid cooling solutions have become increasingly popular for high-performance computing workloads, particularly relevant in this region, where high temperatures make it necessary to have efficient cooling solutions to ensure optimal data centre performance.

How to Set Up a Data Centre in the UAE

It is important to understand, if the data centre plans to hold any sensitive data, it may be considered a regulated activity and need additional third-party approvals. Due to data protection laws and cybersecurity regulations in the UAE if you handle financial, healthcare, or telecommunication data, additional sector-specific regulations will be required from the Central Bank of UAE, Ministry of Health, or Telecommunications and Digital Government Regulatory Authority or whichever relevant approving authority is required.

The General Steps for Datacentre Company Formation:

1. Consider whether you require a Mainland or Free Zone Setup
2. Obtain License which allows for data storage, IT services, or datacenter activities
3. Lease or build the required facilities for data storage - ensure the required datacentre infrastructure adheres to compliance standards and is equipped with high redundancy (e.g., power, cooling, and network connections)
4. Adhere to cybersecurity & data protection laws
5. Obtain relevant certifications will enhance your credibility - Dubai AI Seal
6. Internet connectivity/ telecommunication provider partnerships
7. Approval from the Dubai Municipality and Dubai Civil Defense for the physical infrastructure

For businesses looking to capitalise on this demand and setting up an AI data centre in the UAE or wider GCC region, contact Sovereign PPG to explore the jurisdictions and activities available. Email SovPPG@SovereignGroup.com and we would be glad to assist you.