MIDDLE EAST Trends and Developments Contributed by: Brendan Hundt, Dan Feldman, Sam Anastasiou and Saiesh Kamath, King & Spalding LLP
ing to 6.4 GW by 2034, and has struck partnerships with Nvidia, AMD, Groq and Qualcomm. In November 2025, AMD, Cisco and HUMAIN agreed to form a joint venture to deploy up to 1 GW of AI infrastructure by 2030, starting with a 100 MW phase in 2026. DataVolt has also signed a USD5 billion agreement with NEOM to build a 1.5 GW “net-zero AI factory” at Oxagon, intended to run entirely on renewable energy, with a first phase due by 2028. DataVolt (a Vision Invest sub- sidiary) and HUMAIN have also announced a multi- gigawatt data centre pipeline. Activity is spreading across the wider GCC too, with the wider GCC data centre market estimated to grow from about USD3.48 billion in 2024 to USD9.49 billion by 2030. Special economic zones in Qatar, Bahrain and Saudi Arabia are all being used by those coun- tries to offer lower power prices and streamlined per- mitting for digital infrastructure to incentivise inves- tors to bring projects to their jurisdictions. However, data centre capacity remains concentrated primarily around the UAE and KSA. Role of regulations in shaping how this demand will be met Global hyperscalers typically seek to decarbonise their operations by signing long-term corporate power purchase agreements (PPAs) directly with independ- ent power projects, a model frequently used in the US and Europe. However, the regulatory environment in Middle Eastern jurisdictions generally does not per- mit corporate or virtual PPAs, which leaves operators relying on either their own captive assets or power procured from the local state-backed offtaker. Data centre operators may seek supply from the regulated grid (there are differentiated tariff structures for indus- trial and other consumer categories, including a spe- cial cloud computing tariff which may support data centre power procurement) or self-generation on site (for example, in Abu Dhabi, it is possible to obtain a “self-supply” generation licence to operate captive electricity generation infrastructure). As in many other jurisdictions, co-located BESS and gas-fired power are emerging in the GCC as effec- tive “behind-the-meter” options for high-density loads like data centres and these options are likely to work in tandem with countries’ own grid-scale renewable
initiatives as developers consider the most feasible ways to power their new assets. Why the two trends reinforce each other A more direct connection may be emerging between clean power and data centres. While EWEC and other state-backed single buyers are expected to remain at the centre of the majority of large-scale power pro- curement structures, large, creditworthy data centre operators with a huge demand for long-term energy supplies are fast becoming anchor customers for large-scale captive solar PV and BESS assets around the Middle East. These customers’ demand provides steady, long-term offtakes, making gigawatt-scale projects bankable in the absence of a traditional state- backed single buyer. As a result, new projects of this kind are being developed at pace across the Middle East to meet demand as countries look to establish themselves as regional data centre hubs. This works to the benefit of hyperscalers (generally major technology companies). Many of these compa- nies have adopted their own net zero and sustainabil- ity commitments, bringing the procurement of clean power into sharp focus. Since data centres come with natural resources risks (water scarcity, pollu- tion, increased heating and noise in the environment, among others), we understand that companies tend to be more cautious about matters within their rela- tively direct control, which usually includes power pro- curement. Regions which offer low-carbon sources of power become more attractive as a result and data centre investments tend to follow. Regional resilience and geopolitical considerations Power sectors around the region are also being shaped by a renewed focus on resilience and energy security in response to the ongoing geopolitical insta- bility associated with the conflict in Iran. The disrup- tion to key transit routes like the Strait of Hormuz and the Red Sea has acted as a catalyst for GCC states to fundamentally reassess how their energy is trans- ported and how energy resilience can be maintained over the medium to long term. Alongside significant investment in infrastructure aimed at bypassing maritime chokepoints, there is a parallel push to strengthen domestic power gen-
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