Microsoft Azure / Khazna Data Centers (G42) AI Expansion
Status: Under Development / Phased Expansion | Location: United Arab Emirates (UAE), likely Abu Dhabi
Project Overview
This project represents a crucial component of Microsoft's $15.2 billion total strategic investment in the United Arab Emirates (UAE), specifically aimed at accelerating the country's development as a global Artificial Intelligence (AI) innovation hub. The core of the effort involves a deep partnership between Microsoft and G42, a leading Abu Dhabi-based AI holding company, with the data center capacity being delivered through G42's subsidiary, Khazna Data Centers.
The most recently announced phase is a 200 MW expansion of data center capacity, expected to come online before the end of 2026. This capacity is critical for hosting Microsoft's advanced Azure sovereign cloud services in the region. The term "sovereign cloud" is key, as it signifies a cloud infrastructure that meets the highest local compliance and security standards, making it essential for government entities, public sector organizations, and heavily regulated industries.
The infrastructure is explicitly designed to be AI-ready, supporting the extremely high-density and power requirements of the latest NVIDIA GPU chips (such as the H100 and next-generation models), which Microsoft has secured an export license from the U.S. government to bring into the UAE. This high-density compute power is the engine for training and deploying large AI models. The total investment for expanding AI-driven data centers and cloud facilities is the largest part of Microsoft's commitment, with $5.5 billion earmarked for infrastructure expansion between 2026 and 2029 alone.
Quick Facts
| Field | Value |
|---|
| Project Name | Microsoft Azure / Khazna Data Centers (G42) AI Expansion |
| Location | United Arab Emirates (UAE), likely Abu Dhabi |
| Status | Under Development / Phased Expansion |
| Commissioning | Expected by end of 2026 (Initial 200 MW expansion) |
| Total IT Load | 200 MW (Initial Phase of New Capacity) |
| Total Capacity | Part of a massive, multi-year capacity increase for Microsoft Azure |
| Tier Level | Tier III / Tier IV (Required for sovereign and hyperscale cloud services) |
| Project Type | Hyperscale Cloud and Sovereign AI Data Centers |
City Profile
| Header | Details |
|---|
| City Name | Abu Dhabi / UAE (Centralized for sovereign cloud) |
| Population | Not specified (National/Regional focus) |
| Urban Agglomeration | Not specified (National/Regional focus) |
| City GDP | Not specified (National/Regional focus) |
| Per Capita Income | Not specified (National/Regional focus) |
| City Tier | Global Tier-1/Strategic Digital Hub |
| Key Strengths | Strong government backing; Focus on AI innovation; High levels of digital security and data sovereignty; Key partner for global technology firms. |
Companies Involved
| Header | Details |
|---|
| Developer / Operator | Khazna Data Centers (G42 subsidiary) in partnership with Microsoft Azure |
| Strategic Infrastructure Partner | G42 (Abu Dhabi-based AI giant) and the UAE Government |
| Construction Contractor | To be determined (Delivered via Khazna's network) |
| MEP Engineering | Designed for high-density, AI-compute loads |
| Network Connectivity | High-speed, secure connectivity for Microsoft Azure sovereign cloud |
| Power Infrastructure | Leveraging UAE's robust grid and renewable energy initiatives |
Technical Specifications
| Header | Details |
|---|
| Power Capacity | Significant portion of Microsoft's $5.5 Billion infrastructure spend (2026-2029) |
| UPS Redundancy | High-level (e.g., 2N for mission-critical sovereign cloud) |
| Cooling System | Advanced cooling solutions necessary for GPU-intensive AI racks |
| Connectivity | Supports sovereign cloud, government, and regulated industry clients |
| PUE Target | Focus on low PUE via efficient design |
| Energy Mix | Driven by UAE's commitment to clean/renewable energy goals |
Milestones
| Header | Details |
|---|
| Announcement | November 2025 (200 MW expansion details announced) |
| Construction Start | Ongoing (Expansion of existing/planned facilities) |
| Phase 1 Go-Live | Multi-phase, integrated build-out through 2029 |
| Full Buildout | Ongoing expansion; major milestones by end of 2026 and end of 2029 |
Investment Details
| Header | Details |
|---|
| Total Investment | $15.2 Billion USD (Microsoft's total strategic investment in UAE, part of which is for DC/AI infrastructure) |
| Funding | Microsoft (part of its $15.2B commitment) and G42/Khazna |