Microsoft and G42 have announced a major expansion of data center capacity in the UAE, marking a milestone in the country's digital transformation initiative. The partnership will deliver a 200-megawatt expansion of data center capacity through Khazna Data Centers, a subsidiary of G42, with operations expected to come online before the end of 2026.

Investment and Infrastructure Details

The data center expansion is part of Microsoft's broader USD 15.2 billion investment announcement in the UAE. The 200MW data center expansion will provide additional AI and cloud infrastructure to boost Microsoft Azure's secure, scalable, and sovereign cloud services in the region.

The expansion will feature advanced GPUs and AI capabilities designed to help public sector organizations, regulated industries, and enterprises to innovate, scale, and operate with greater agility and resilience. Infrastructure development is carried out through Khazna Data Centers, a subsidiary of G42.

Strategic Partnership and Governance Framework

The collaboration between Microsoft and G42 is built on shared commitments to trust and responsible innovation, grounded in high standards of cybersecurity, data protection, and ethical AI. The partnership has established the Responsible AI Future Foundation through collaboration between Microsoft, G42, and MBZUAI, which serves as a global model for responsible AI development and governance.

The companies have previously established joint initiatives, including the Global Engineering Development Center and the AI for Good Lab in Abu Dhabi. These facilities continue to collaborate with government and educational institutions to ensure inclusive access to digital skills and foster the next generation of technology leaders.

Economic and Skills Development Impact

The expansion supports the UAE's national digital economy strategy, which aims to double the digital economy's contribution to GDP over the next decade. The partnership aligns with Microsoft's commitment to skill one million people in the UAE by 2027, with the expansion expected to unlock new opportunities for local talent in AI, cloud, and digital services.

G42 Group CEO Peng Xiao stated that the partnership advances G42's mission to build the Intelligence Grid, describing it as “the interconnected infrastructure for intelligence designed to empower people, industries, and nations in the AI era.” Xiao emphasized that as a neocloud enterprise born in Abu Dhabi, G42 is advancing systems that are sovereign, secure, and open to global collaboration, keeping technology human by design.

Leadership Statements and Vision

Brad Smith, Vice Chair and President of Microsoft, characterized the expansion as more than just data centers, stating, “It is about powering the UAE's future.” Smith highlighted that by combining Microsoft's global expertise with G42's local leadership and broader role as an international neocloud enterprise, the partnership is building the foundation for innovation that will create new opportunities for people across the country.

The expansion reinforces the UAE's leadership position in the region's digital economy and builds on a series of joint efforts between Microsoft and G42. These previous collaborations include the launch of the Responsible AI Foundation and the establishment of AI research centers in Abu Dhabi.

The partnership represents what the companies describe as the building of a digital backbone for a future defined by trust, technological excellence, and inclusive growth. The announcement was made on November 5, 2025, as part of the ongoing strategic partnership between the two technology companies to accelerate the UAE's digital transformation initiatives.

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