Dubai’s Hodler Investments has teamed up with US tech firm Vertical Data to establish AI-powered sustainable data centers across the UAE, Gulf region, Africa, and Canada. The partnership aims to meet the growing demand for high-performance computing, driven by the surge in AI applications, which have placed a strain on existing data center capacity and significantly increased energy requirements.
The UAE, home to the largest concentration of data centers in the Middle East and North Africa, has seen vacancy rates drop to just 9% by Q3 2023, a sharp decline from previous years, according to real estate consultancy Knight Frank.
Under the collaboration, Hodler will provide renewable and hybrid energy to power the data centers, while Vertical Data will manage operations and offer its GPU-as-a-Service (GPUaaS) – a cloud-based solution enabling businesses to access on-demand computing power for AI and data-intensive tasks without investing in their own infrastructure. This flexible approach allows companies to adjust computing capacity as needed, avoiding the high costs and long-term commitments typically tied to traditional data center contracts.
“We plan to deploy the first 20 megawatts (MW) of capacity in two GCC countries by Q1 2025,” said Mohamed El Masri, Hodler’s managing director. The company aims to roll out 200MW of data center capacity across the GCC next year, supported by clients in AI and blockchain services.
El Masri emphasized that the partnership would help accelerate the development of distributed energy infrastructure to power AI clusters in the UAE and the broader Gulf region. Hamid Djam, Vertical Data’s head of technology, noted that the collaboration would improve processing speed and efficiency, while Hodler ensures sustainable mobile power for the data centers.
Hodler is financing the expansion through its $500 million Digital Energy Infrastructure Fund, launched in August. The company has already secured nearly one gigawatt of hybrid power projects through its subsidiaries NexGen, Brox, and PermianChain. Hybrid projects combine renewable energy sources like solar and wind with traditional fuels such as natural gas or diesel, ensuring reliability and scalability for AI and blockchain computing.
The Middle East data center market is projected to grow from $5.6 billion in 2023 to $9.6 billion by 2029, driven by AI and cloud services, according to consultancy Turner & Townsend. Hodler and PermianChain are also collaborating with US-based AI infrastructure providers to bring cutting-edge technology to the region.
However, experts have raised concerns that existing infrastructure is struggling to keep up with demand. Quentin Reyes, CEO of IT services company Hyperfusion in Dubai, warned in October that infrastructure is one of the “biggest bottlenecks” for AI in the region.
