Gigawatt race in the Middle East sees Global Energy Report put network abundance to the test of high-end computing

The main obstacle to AI expansion is no longer limited to abundant cash liquidity or the supply of advanced processing chips; the burden has shifted to electricity plugs and the capacity of distribution networks to feed compute clusters. In this context, the 2026 Global Energy Report from the International Data Center Authority (IDCA) notes a qualitative shift in global investment direction toward the Middle East, driven by a severe energy crisis and regulatory constraints that curb expansion in established markets such as the United States, Germany, Singapore and South Korea.

Data centers worldwide currently consume roughly 2 percent of total global electricity generation, with forecasts indicating a 50 percent jump in AI data-center consumption, putting power grids under unprecedented pressure. In contrast, data-center consumption in the Middle East remains below 0.5 percent of the region’s total electricity, a wide margin that gives the area an exceptional competitive advantage to accommodate the next generation, now referred to as AI factories, according to IDCA chief and founder Mahdi Bariafi, who likened compute centers to modern refineries that refine data as humanity’s most valuable resource.

Current figures reveal a clear concentration in the region’s computing architecture:The region’s data-center consumption approaches one gigawatt in total, with Saudi Arabia and the United Arab Emirates alone accounting for about 80 percent, 440 megawatts in Saudi Arabia and 340 megawatts in the UAE. Saudi Arabia, ranked 44th globally on the Authority’s Digital Readiness Index, pursues a vision to reach six gigawatts of AI data-center capacity by 2034, backed by major initiatives such as the PIF-owned Huumain company, the Hexagon centre under Sedia, and national operators like Center 3, Mobily and Data Volt. In contrast, the UAE has bolstered its operational presence by fully adopting the Khazna portfolio through the Authority, while Oman launched the “Omani Digital Triangle” project to deploy nine gigawatts of AI applications, leveraging its location as a compute hub less exposed to geopolitical tensions.

This momentum is part of a broader regional movement; Egypt, with a population over 100 million, bets through its national strategy on raising AI’s share of GDP to 7.7 percent by 2030, while Jordan develops its digital transformation roadmap and the Iraqi government intensifies efforts to attract infrastructure investors. Yet Bariafi points to the real challenge facing the region, warning that the fallout from regional conflicts and uncertainty constitutes the biggest obstacle to bringing capital, necessitating accelerated Arab integration in governance, the creation of clear cross-border data-transfer frameworks, and the nationalization of unified standards that bolster the region’s negotiating power as a cohesive economic bloc.

This on-the-ground shift reshapes operational decisions for the region’s tech leaders:If you manage the infrastructure of a bank in the Gulf or a startup in Egypt or the Levant, local expansion of high-performance computing necessarily reduces reliance on remote inference pulling from European and U.S. data centers, shortening response times and giving digital products greater speed. At the same time, it imposes strict compliance requirements to domicile sensitive data on local servers, shifting engineering teams’ skills from managing ready-made cloud subscriptions to controlling energy consumption, handling high-density cooling, and designing hybrid architectures that align with regulatory frameworks for data transfers between shared Arab markets.

The AI race is no longer a contest of abstract algorithms; it has become a heavy-infrastructure equation where power grids, cooling plants and digital policies intersect. Whoever in the region can secure energy capacity and unify data pathways will hold the right to run the next generation of reasoning and inference models.