UAE’s data center deal with France a notable step forward for region’s AI infrastructure

Booming demand for AI is driving robust demand for data centers globally and in the Middle East, with a recent groundbreaking deal between the UAE and France serving as a shining example of action, writes Aakash Gupta, partner at risk analyst firm 4most.

Having dedicated my career to the implementation of risk management solutions in areas such as credit decisioning, model risk management, and climate-related financial risks, I’ve witnessed how artificial intelligence (AI) has become a driving force behind industrial transformation.

For AI to truly flourish, however, it requires more than sophisticated algorithms; it demands immense computational power and secure data infrastructure. This is where data centres are emerging as a critical component of the ecosystem.

A groundbreaking framework agreement between the UAE and France aims to address this very need with the development of a 1-gigawatt AI data centre, valued at between $30 and $50 billion. Announced during President Macron’s recent meeting with His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, this initiative marks a bold step toward reinforcing digital sovereignty while reducing reliance on tech superpowers like the United States and China.

By channeling investments into AI research, advanced chip technology, data infrastructure, talent development, and even virtual data embassies, the UAE and France are not just building physical facilities; they are shaping the future of AI innovation.

The UAE has long been a leader in AI and digital transformation, consistently setting benchmarks across the region. This partnership with France aligns seamlessly with Vision 2031, which aims to position the UAE as a global partner and a dynamic economic hub. Among the key goals of the “We the Emirates 2031” vision is raising the nation's GDP from AED 1.49 trillion to AED 3 trillion.

This ambitious collaboration seeks to integrate AI into all sectors of society. By co-investing in AI infrastructure, the UAE is bolstering its position as a global AI powerhouse while also driving economic diversification and sustainable growth.

Meanwhile, France is cementing its role as a leader in Europe’s AI landscape. With 35 strategic sites identified for hosting AI data centers, France is showcasing its commitment to developing a robust AI ecosystem capable of spearheading innovation across industries. Announcements expected at the upcoming Choose France summit will further underscore the country’s ambitions to rival the US and China in AI technology.

The global demand for AI-ready data centres is surging, projected to grow by up to 22% annually from 2023 to 2030, potentially reaching a staggering 219 gigawatts. This growth is fueled by the rising adoption of generative AI and advanced machine learning technologies, which demand unprecedented computational power.

By 2030, 70% of data centers are anticipated to support advanced AI workloads. The AI infrastructure market, valued at $23.5 billion in 2021, is forecast to grow to $309.4 billion by 2031 – a compound annual growth rate of 30%.

This UAE-France collaboration arrives at a pivotal moment. With AI adoption accelerating worldwide, these nations are positioning themselves at the forefront of technological progress and global policy discourse. By uniting their efforts, they are charting a future where innovation thrives on collaboration, sovereignty, and foresight.