Billions Pour Into the Gulf’s AI Infrastructure

Tim Elliott (0:00)

This is the Morning Drive. The Gulf is investing heavily in the infrastructure needed to power the next wave of AI. We have more than 170 active and planned data centers across the region. But as investment grows, so do questions around energy and talent, and whether the region can turn its AI ambitions into lasting economic growth.

CNN correspondent, the anchor of Connecting Africa and Marketplace Middle East, Eleni Giokos is on the line, hopefully to explain what is driving this surge in investment and what she's been finding in her most recent reporting. Eleni, it's good to have you on the show. Thanks for joining us.

Eleni Giokos (0:43)

Great to be with you. What a time to be having a conversation around AI.

Tim Elliott (0:48)

It's a very, very usual thing in this studio. I'm sure you're finding the same. Your reporting across the region means, here you are, you're kind of at the intersection, aren't you, of capital and policy and technology.

So when you look at the sheer scale of data center investments happening across the GCC right now, what is, from your research, from your understanding, the real core strategic driver in the race?

Eleni Giokos (1:17)

Well, I think that it's pretty evident that the whole world is in this AI race. Who's going to do it better? Who's going to do it first? Who's going to innovate, who's going to implement and integrate across businesses, across governments? Because that is the big strategic push, I think, across the board. The region has been pioneering a lot of that push. And from hearing from the UAE government, from Saudi Arabia, generally across the Gulf States, is that there's a big need to move away from oil-based economies into more knowledge-based economies. AI is definitely at the forefront of that. So AI is the stuff that we're going to use to innovate and to make our lives easier and remove friction. But building data centers is absolutely integral in that because you need the backbones and you need the bricks and mortar and you need the hardware to make that happen.

And we also know that the UAE was the very first country in the world to have an AI minister. So I think it's pretty obvious that strategically, it's been very much imbedded in the future of not only the UAE, but across the region that AI is going to be part of our lives. And what positioning and role is the region going to have at a global level? And when I see the kind of investments that is being put on the table and the sheer commitment, not only from government, but also some of the companies that are involved, it's really incredible to see the mobilization of funds and also, generally, the excitement around the region playing that massive role on a global level.

Tim Elliott (2:57)

And we've got a regional data center market projected to exceed, I'm just going to check my figures, I'm sure these are right, $9.4 billion by 2030 So that is a global nexus, if you like, for artificial intelligence. It's huge, as the US president may want to say. First of all, is that unnecessary hyperbole?

I want to check those figures. Do they correlate with the figures that you perhaps have? And third, how significant is that figure in terms of the wider AI story that we're seeing unfold in the Gulf?

Eleni Giokos (3:34)

I mean, it's really interesting, because when we're looking at the numbers, we found multiple sources with different numbers. And the range is quite big. So around the $10 billion mark is sort of what we were looking at as well. But we didn't commit to any one number in our reporting on my show, Marketplace Middle East, because we just found so many different numbers out there. So there's the data center portion of it, the cloud services, it's how companies are integrating AI. But one thing asserts that the number is going to be extraordinary and it is going to be absolutely enormous. And one only has to look at, for example, when we're talking to Microsoft, they're investing over $15 billion in data centers and technology until 2029 in the region. So when I look at all the figures, it definitely runs into the high billions and where it's going to settle remains to be seen. Because you've got the, as you mentioned, the 170 data centers that are either in construction or planned for construction by 2030 Taking into account that many countries in this region have vision 2030, AI and data centers are very much part of that vision. So and a lot of money is moving into this space. And I think that number is probably an underestimation.