Technology

The Middle East has emerged as the world's most cost-competitive region for data centre construction, offering a critical advantage as global demand for artificial intelligence (AI) infrastructure surges.

The Middle East has emerged as the world's most cost-competitive region for data centre construction, offering a critical advantage as global demand for artificial intelligence (AI) infrastructure surges.

According to the 10th edition of Turner & Townsend's Data Centre Construction Cost Index for 2026, the region's average build cost stands at $9.93 per watt, undercutting major markets across Europe, Asia, and North America.

The index, evaluating 62 international markets based on a standard 60-megawatt (MW) facility design, highlights a stark contrast in construction expenses. Tokyo remains the most expensive market to build a data centre, commanding $18.28 per watt. It is closely followed by Zurich at $15.93, Singapore at $15.39, and Silicon Valley at $15.01 per watt. Conversely, the United Arab Emirates (UAE) ranks among the top five most affordable markets globally, sitting at 58th place with an average cost of $9.20 per watt. While cities like Shanghai ($5.79) and Mumbai ($6.83) offer lower pricing, the Middle East as a wider region averages out as the most financially viable hub for hyperscale development.

Driving sovereign AI and digital capacity

The data centre sector has evolved from a niche commercial real estate segment into a dominant driver of global construction activity. This growth is heavily fuelled by AI, requiring gigawatt-level power and advanced liquid cooling systems to support high-density racks. This exponential demand is drawing massive capital investment into the Middle East, where government-backed initiatives actively support digital expansion.

Alan Coary, Director and Data Centre lead for the Middle East at Turner & Townsend, highlighted the strategic moves across the region. "Saudi Arabia's HUMAIN initiative and the UAE's continued investment in AI and hyperscale data centre development through G42 and Khazna are transforming the region's computing capacity and positioning it as a globally competitive AI hub," he stated.

Overcoming global supply chain and power constraints

While the Middle East enjoys a cost advantage, the broader global market is grappling with escalating expenses and delivery hurdles. The Turner & Townsend report notes that 52 per cent of survey respondents experienced cost increases of over 6 per cent this year, while 20 per cent reported inflation exceeding 15 per cent. With more than half of respondents anticipating their 2027 projects will be dedicated to AI workloads, pressure on supply chains and skilled labour is intensifying.

"However, rising material and labour costs continue to create challenges globally, while access to power, specialist equipment and skills continue to create bottlenecks," the report noted. "Data centres are also subject to increasing scrutiny, with political and community consent essential to delivery."

Power availability remains the most critical barrier to entry worldwide. Globally, 56 per cent of industry respondents identified securing sufficient power as the primary obstacle to delivery.

• Connection delays: 52 per cent of respondents revealed utility connections typically take one to two years to establish.

• Severe backlogs: 32 per cent reported waiting periods stretching beyond two years.

The push for larger, gigawatt-scale facilities has only amplified these delays, adding a cost premium to complex mega-projects.

Navigating interconnected industry challenges

Global capital expenditure on data centres has already reached an estimated $800 billion annually, with forecasts suggesting it could climb to $1.8 trillion by 2050. As operators race to build complex facilities, success requires a holistic development approach extending beyond individual construction sites.

Paul Barry, Data Centre Construction Cost Index Lead at Turner & Townsend, emphasised the need for strategic collaboration. "Success will ultimately depend on the industry's ability to think beyond the boundaries of a single project," Barry explained. "Power, water, supply chains, labour, planning, sustainability and data sovereignty are becoming interconnected challenges that require coordinated solutions."

By maintaining its competitive build costs, the Middle East is well-positioned to capitalise on this global digital boom. However, sustaining this momentum depends on effectively managing universal challenges surrounding power supply and specialised labour.

the Artificial Intelligence Office in the United Arab Emirates has collaborated with Microsoft to launch the UAE Vibe Codes initiative.

Today, the focus is shifting from intricate syntax to human creativity, an approach known as "vibe coding".

Embracing this shift, the Artificial Intelligence Office in the United Arab Emirates has collaborated with Microsoft to launch the UAE Vibe Codes initiative. Unveiled during the annual UAE Codes Day on 29 October, the nationwide programme allows individuals to transform their concepts into functional digital applications in minutes, requiring zero prior coding experience.

Democratising digital innovation

At the core of this initiative is a drive to make technology development accessible to everyone. By visiting https://uaecodesday.specnt.com, participants can experience vibe coding firsthand. Users simply describe their ideas in natural language, and AI-powered tools instantly translate these descriptions into working prototypes.

This approach places human purpose at the forefront of development. Whether building an application to organise administrative tasks, a website to address a workplace challenge, or a digital tool to support a startup, the technology facilitates immediate results. The public response has been overwhelming, attracting 5,000 participants within the first hour of launch and highlighting a strong national appetite for AI innovation.

Empowering society for a digital future

The UAE’s leadership envisions a future where advanced technologies enhance everyday life. His Excellency Omar Sultan Al Olama, Minister of State for Artificial Intelligence, affirmed that the nation continues to establish a pioneering model for equipping society with future-ready tools. He stated that the true value of artificial intelligence lies in its capacity to expand human innovation and turn ambitious ideas into reality.

His Excellency noted that the initiative builds public confidence, enabling individuals to benefit from rapid advancements in software development. He added that UAE Codes Day represents a vital opportunity to broaden participation in shaping the digital landscape, reinforcing the reality that once-inaccessible capabilities are now within everyone's grasp. This collective empowerment is expected to further strengthen the UAE's global competitiveness.

Broad participation across sectors

To ensure widespread impact, UAE Codes Day features extensive participation from various government departments, private sector organisations, and entrepreneurs. Key participants include:

• Ministry of Education and Ministry of Justice

• General Authority of Islamic Affairs, Endowments and Zakat

• UAE Space Agency and Dubai’s Roads and Transport Authority (RTA)

• Etisalat UAE, du, and Emirates Health Services (EHS)

• Emirates NBD and Furjan Dubai

Simultaneously, the UAE Office of Artificial Intelligence is orchestrating hands-on workshops alongside major industry partners such as Google, Emirates Global Aluminium (EGA), Siemens, and IBM. These interactive sessions introduce the fundamentals of vibe coding. Participants identify a challenge and deploy an AI-generated digital prototype. This experiential learning model equips participants with new skills and opens fresh opportunities to expand the use of coding across different sectors.

Expanding community engagement

The drive for digital literacy extends beyond corporate environments. To maximise community outreach, the Office of Artificial Intelligence has partnered with Emaar and various cinemas across the country. Through digital screens and public platforms, the “UAE Vibe Codes” experience is promoted to wider segments of society, encouraging families to explore AI tools. By broadening access to digital skills, the initiative helps foster an environment where creativity can thrive, reinforcing the principle that building the digital future is a shared responsibility.

The legacy of UAE Codes Day

The emphasis on digital readiness is rooted in recent history. In October 2021, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, directed that 29 October be designated as UAE Codes Day. This commemorates the 2001 launch of the region's first e-government initiative, which catalysed the nation's digital transformation. Further cementing this legacy, UNESCO adopted the UAE's proposal in November 2023 to designate 29 October as the International Day of Programming, reaffirming the country's status as a global destination for technological talent.

Cisco, a global technology leader driving innovation in AI-powered digital infrastructure, has announced plans to build sovereign AI infrastructure in Qatar.

Cisco, a global technology leader driving innovation in AI-powered digital infrastructure, has announced plans to build sovereign AI infrastructure in Qatar.

This strategic endeavour is partnered with Mannai Corporation QPSC, operating through Mannai Technologies – Networking & ELV.

This collaboration brings together Cisco’s advanced capabilities in computing, networking, cybersecurity, and infrastructure management with Mannai’s deep-rooted local expertise. Together, they are addressing the rapidly growing demand for secure, resilient, and locally controlled AI environments. As governments and enterprises accelerate artificial intelligence adoption, placing greater emphasis on sovereign digital assets is now a strategic necessity.

The rising imperative of digital sovereignty

Digital sovereignty revolves around a nation's or an organisation's ability to maintain ultimate control over its digital destiny. This encompasses physical hardware, software ecosystems, and the sensitive data flowing through them. Recently, the acceleration of AI has amplified these concerns, introducing complex challenges regarding data privacy and the security of critical digital infrastructure.

To mitigate these risks, there is escalating demand for systems guaranteeing operational independence. Cisco’s Sovereign Critical Infrastructure portfolio is engineered to meet these exacting requirements. The portfolio integrates advanced technologies across vital domains, providing a robust framework for organisations that refuse to compromise on data sovereignty.

Key components of this secure ecosystem include:

• Advanced networking: Ensuring reliable data transmission within strictly defined, locally controlled parameters.
• Robust cybersecurity: Protecting sensitive data against external threats and ensuring compliance with national regulations.
• Collaboration tools: Facilitating secure communication channels for internal government and enterprise teams.
• Comprehensive observability: Providing real-time insights into system performance and data flow.

These technologies are designed explicitly for customer-controlled environments. This includes support for on-premises setups and fully air-gapped deployments. By isolating critical systems, organisations ensure essential services operate autonomously without reliance on external networks.

A synergy of global and local expertise

The foundation of this newly announced sovereign AI initiative is a relationship spanning more than three decades of technology collaboration in Qatar. Mannai Technologies – Networking & ELV brings immense local knowledge to the partnership. Their invaluable contribution encompasses engineering, systems integration, and bespoke deployment expertise.

This local footprint complements Cisco’s extensive global portfolio. Navigating the multifaceted infrastructure requirements of sovereign AI is a formidable challenge, but their combined strengths create a clear pathway for implementation. Together, Cisco’s technology vision and Mannai’s on-the-ground capabilities provide a solid foundation for deploying resilient AI infrastructure.

Driving Qatar National Vision 2030

The implications of this partnership extend far beyond standard IT upgrades. For Qatar, the development of sovereign, AI-ready infrastructure aligns seamlessly with the nation’s broader digital transformation ambitions. These goals are encapsulated within the Qatar National Vision 2030, a developmental blueprint emphasising economic diversification and advanced technological enablement.

The demand for locally controlled AI environments is surging across foundational pillars of the Qatari economy. Cisco and Mannai are directly supporting critical sectors, including:

• Government services: Securing sensitive public data and ensuring the independent delivery of civic services.
• Energy: Optimising resource management and protecting vital national energy grids from digital disruptions.
• Financial services: Safeguarding financial transactions and maintaining the integrity of the banking sector.
• Healthcare: Protecting confidential patient records while enabling advanced, AI-driven medical research on local servers.

As Qatar prepares for its next phase of digital innovation, the ability to leverage artificial intelligence securely will be a defining factor in its success. This initiative sets a benchmark for how global tech innovators and local partners can collaborate to build sovereign digital infrastructure. Through an unwavering commitment to operational independence, Cisco and Mannai are ensuring that Qatar's digital transformation remains deeply innovative and rigorously protected.

Dubai Chambers has launched the "Chamber AI Hub", marking a significant milestone as the world’s first chamber-led Agentic AI marketplace.

The private sector in Dubai is experiencing a significant shift, embracing artificial intelligence to streamline operations and enhance competitiveness. 

The integration of advanced technologies is no longer just an option; it is an absolute necessity as the global business landscape rapidly evolves,.

Dubai Chambers has launched the "Chamber AI Hub", marking a significant milestone as the world’s first chamber-led Agentic AI marketplace. This innovative platform enables companies operating within Dubai to access a suite of ready-to-use, specialised AI solutions designed to tackle a wide array of business challenges.

The initiative is a direct response to the directives of H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Deputy Prime Minister and Minister of Defence of the UAE, and Chairman of The Executive Council of Dubai, who aims to accelerate the adoption of Agentic AI across the city's private sector.

H.E. Eng. Sultan bin Saeed Al Mansoori, Chairman of Dubai Chambers, commented: “Success in the transition to Agentic AI is measured not by technology adoption alone, but by how effectively companies use these tools to address business challenges and deliver tangible results. This is why we are connecting knowledge with practical application, building capabilities, and expanding access to specialised solutions and high-quality tools that help companies adapt to change and evolve the way they work. Through this approach, we are preparing a private sector that is equipped to respond to technological transformation and contribute to shaping the opportunities of the future economy.”

Key features of the AI marketplace

The Chamber AI Hub is designed to be accessible, practical, and highly secure. It offers a comprehensive ecosystem for businesses looking to integrate AI into their daily operations.

• Current offerings: The platform currently provides access to 22 specialised AI agents.

• Functional areas: These agents cover seven key areas: Compliance, Procurement, Operations, Finance, Sales, Human Resources, and Logistics.

• Future expansion: There are plans to expand the offering to a total of 100 AI agents.

• Specific tasks: The available solutions support tasks such as supplier discovery, evaluation of vendor proposals, monitoring supply chain risks, contract review, invoice matching, generating business proposals, screening resumes, lead scoring, and handling IT help desk requests.

• Sandbox environment: Companies can test any AI agent in a secure sandbox before full activation.

• Flexible pricing: Members receive complimentary credits to start, with options to transition to usage-based paid packages, along with competitive benefits.

• Management tools: Dashboards provide visibility into usage levels, costs, and success rates. A company admin portal allows administrators to monitor their teams’ use of the agents, and a readiness assessment helps determine preparedness.

• Compliance and security: The platform complies with UAE regulatory requirements, observing strict data privacy and protection standards. All data is hosted within the UAE, ensuring each company's information remains isolated.

• Language support: The AI agents support both Arabic and English.

A broader vision for Dubai's private sector

The launch of the Chamber AI Hub is part of a much larger programme overseen by Dubai Chambers. The ambitious goal is to enable more than 295,000 private sector companies and roll out the planned 100 specialised AI agents over the next two years.

Furthermore, the programme features specialised training tracks designed to educate 14,000 companies from various Business Groups and Business Councils. This training aims to empower them to effectively deploy Agentic AI technologies within their administrative and operational processes. The initiative also focuses on supporting the growth of companies that specialise in developing these AI solutions, thereby promoting knowledge-sharing and building robust institutional capabilities across the entire Dubai Chambers ecosystem.