GCC data centre capacity to triple to 3GW on AI demand, says S&P
Data centre capacity across the Gulf Co-operation Council (GCC) region is projected to roughly triple to over 3 gigawatts (GW) over the next five years as regional economies build out the physical computing infrastructure needed to support artificial intelligence and cloud services.A report by S&P Global Ratings indicates that Saudi Arabia and the UAE are leading the region’s large-scale data centre expansion. Together, the two nations account for more than 80% of expected data centre capacity additions through 2030, driven by national AI strategies, data localisation mandates, and state-led economic diversification efforts.S&P noted that momentum is also building in other GCC markets, as hyperscaler-backed demand expands beyond the two largest regional economies. The report cited Qatar’s MEEZA signing an 8-megawatt (MW) long-term lease contract worth over QR1bn with an unnamed global hyperscaler as evidence that high-density computing demand is taking root across the wider peninsula.The rating agency highlighted major cost and speed advantages that position the GCC favourably against mature Western markets. Electricity tariffs in Saudi Arabia and the UAE range from $0.05 to $0.06 per kilowatt-hour (kWh), compared to $0.09 to $0.15 per kWh in the US. Furthermore, data centres in the Gulf can secure grid connections in 12 to 18 months, whereas operators face waits of four to seven years in North America and Europe.Access to advanced graphics processing units (GPUs) has improved following changes in US export control regulations, shifting the primary development constraint to power, connectivity, and cooling infrastructure. S&P pointed out that easing US restrictions in mid-2025 allowed regional platforms like Saudi Arabia’s HUMAIN and the UAE’s G42 to secure tens of thousands of advanced AI chips.To accommodate power-intensive AI workloads while managing extreme summer temperatures and regional water stress, operators are adjusting cooling designs and energy procurement. Average rack densities surged from 16kW in 2025 to 27kW in 2026, forcing a shift from traditional air cooling to liquid cooling systems that can reduce on-site water consumption by up to 91%.Recent geopolitical events have also made physical resilience a key factor in facility design. Damage to data centres operated by Amazon Web Services in the UAE and Bahrain during regional conflict demonstrated how physical disruptions can lead to extended service outages. In response, operators are adopting greater site dispersion, blast-resistant construction, and underground installations, which can increase capital costs by 5 to 7%.S&P noted that long-term bankability for GCC data centres will depend on strict execution discipline and clear risk allocation. Projects supported by long-term capacity contracts with creditworthy off-takers provide stable cash flows, whereas speculative builds leave developers exposed to demand shifts and rapid technological obsolescence.“In our view, projects supported by committed capacity to creditworthy counterparties provide greater visibility on future cash flows, while speculative development leaves developers exposed to changes in demand, execution, and technology risks that can materially erode credit,” S&P stated.