Microsoft and G42 Announce 200MW UAE Datacentre Build-Out to Accelerate AI and Cloud Sovereignty

Post by : Bianca Suleiman

The UAE is poised for a substantial upgrade to its digital backbone after Microsoft and Abu Dhabi-based G42 revealed plans to increase datacentre capacity by 200 megawatts through Khazna Data Centres. This project forms part of Microsoft’s wider $15.2 billion investment in the country and is targeted to be operational before the close of 2026.

The new facilities are designed to deliver advanced AI and cloud services, enhancing Microsoft Azure’s secure, scalable and sovereign cloud offerings for the UAE market. Outfitted with high-performance GPUs and modern AI infrastructure, the capacity boost will support public-sector agencies, regulated industries and private enterprises as they expand digital services and deploy AI-enabled solutions.

Central to the partnership is a strong emphasis on trust, cybersecurity and ethical innovation. A key development in this area is the Responsible AI Future Foundation — a collaborative initiative between Microsoft, G42 and the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) aimed at establishing international norms for responsible AI governance and development.

Beyond infrastructure, the agreement targets human capital development across the country. In line with Microsoft’s pledge to train one million people in digital and AI skills by 2027, the expansion is expected to open new training and employment pathways. Microsoft and G42 have already invested locally through the Global Engineering Development Centre and the AI for Good Lab in Abu Dhabi, working closely with academic and government partners.

The initiative supports the UAE’s broader objective to double the digital economy’s share of GDP over the coming decade. By strengthening cloud and AI capabilities domestically, the country aims to attract investment, accelerate digital transformation and foster innovation across multiple sectors.

More than an increase in computing power, the 200MW datacentre expansion signals a strategic commitment to a secure, sovereign and innovation-led digital ecosystem that benefits businesses, public services and the broader UAE economy.