After years of rapid expansion, the Middle East data centre spending spree is expected to slow in 2026, shifting focus from sheer growth to long-term, sustainable development.
According to technology consultancy Gartner, spending on data centre infrastructure in the region surged 69% year-on-year in 2025. In 2026, that growth rate is projected to ease to 39%, as the rush to build AI-focused infrastructure gives way to more measured investments.
“The initial surge in AI-focused infrastructure is tapering off, leading to normalisation after a period of rapid expansion,” said Eyad Tachwali, VP of advisory in Dubai.
Data centres are the backbone of AI, essential for training, deploying, and scaling advanced models. Regional governments in the Middle East, hyperscalers, and AI firms are expected to spend $9.5 billion on data centres in 2025, rising to $13 billion in 2026.
However, industry experts note that these projects require massive upfront capital, with slower spending after initial build-outs. Investments go heavily into high-end processors like Nvidia chips costing $30,000/$40,000 each, which are essential to power AI workloads.
Major Middle East Projects Include:
- UAE’s Stargate Project, a 1 GW supercomputing cluster with OpenAI.
- Saudi Arabia’s Humain, 18,000 Nvidia chips purchased, scaling a 50 MW centre to 500 MW, plus a $5B “AI Zone” with AWS.
- Kuwait’s Omniva Partnership, a 1 GW facility in collaboration with the global provider.
Even with growth rates slowing, suppliers like Western Digital report steady demand for storage hardware, fuelled by government, energy, telecom, and cloud sectors.
Why This Matters for MENA Startups
The shift from explosive to sustainable growth could reshape opportunities for tech founders in the Middle East and Northern Africa region:
- Longer timelines, but steadier funding: Infrastructure slowdowns mean AI and cloud-based startups may find more predictable, phased access to resources.
- Better integration opportunities: As data centres move into operational phases, startups can plug into existing infrastructure without waiting for massive new builds.
- More emphasis on optimisation over scale: Investors and governments may prioritise software, AI model efficiency, and edge computing, areas where agile startups thrive.
- Regional AI ecosystems maturing: With hyperscalers and sovereign funds committed to long-term projects, startups can tap into partnerships, co-development deals, and early adoption programmes.
The Middle East’s data centre boom isn’t ending, it’s maturing. For MENA startups, this could mark a golden period of strategic collaboration over capital frenzy.
