Build baby build

Desert data boom

By Patrick Sisson

Thu 06.27.24

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In the Middle East, data really is the new oil

The Gulf’s data-center spending spree underscores a new effort to reshape the regional economy

Patrick Sisson

6/27/24 8:00AM

The Middle East has been the site of fantastical infrastructure projects and proposals before. Think of the Burj Khalifa in Dubai, Riyadh’s $22 billion metro system, the seven futuristic soccer stadiums built across Qatar for the World Cup, or the proposed linear cities and tourist hotels that would bring sci-fi landscapes to the Saudi desert.

But one of the most ambitious development projects in the region — a far-reaching effort to bring data and digital infrastructure to the desert — is well underway. In large cities like Abu Dhabi, Riyadh, Jeddah, Dammam, and Kuwait City, massive data-center complexes are being built to enable one of the most expensive and valuable things in the world: the digital cloud.

Across the region, local development companies and utilities, sovereign wealth funds, and even Silicon Valley giants have invested extensively in data centers and the cables that connect the digital world. Owing to tension in the Red Sea, where existing undersea cables ferry the world’s data, a race is underway to string cables above ground connecting Europe and Asia, with rival projects charting paths through Saudi Arabia, Jordan, and Iraq.

“You need to have a good connectivity ecosystem if a region is going to grow as a data-center hub,” Ciena Chief Technology Officer Steve Alexander said. The firm is currently providing the equipment for a project laying a cable from Turkey through Iraq. “There’s a lot of money that’s been put into these cables, and a lot more that’s going to be put in.”

Owing to tension in the Red Sea, a race is underway to string cables above ground connecting Europe and Asia.

The Middle East doubled its IT infrastructure between 2021 and 2024, and the amount of data-center space under construction has increased twofold during that time — from 171 megawatts to 368 MW, according to Scott Roots, regional sales director for data-center analytic firm DC Byte. (The industry measures this construction in data stored versus square feet.) Saudi Arabia, which boasted 123 MW of data-center capacity at the end of 2023, according to DC Byte, plans to more than quadruple that over the next few years.

“It's a massive acceleration,” said Amro Almashharawi, Dubai-based vice president of digital transformation for the Uptime Institute, a global industry advocacy organization.

The region’s location at a geopolitical pinch point has long made it a political and economic nexus, and its petroleum wealth has made it a financial superpower. Now, the Middle East and its largesse are becoming a preeminent power player in the data business — the oil of the digital age. The return on investment can be massive; Almashharawi said he regularly sees 20% returns for data-center projects.

But unlike in the US, where private firms and hyperscalers like Meta, Amazon, and Google have driven massive data-center booms in areas like Northern Virginia, the Middle East has governments investing in build-outs and incentives. As a result, issues of data sovereignty, growing workforces, and economic development efforts underpin the push to expand next-generation digital infrastructure. Almashharawi said this includes subsidized land, quicker permitting, lighter regulation, and even discounts on energy.

A string of deals with Silicon Valley giants will only accelerate these developments. In March, Saudi officials announced $10 billion in data-center investment, with $5 billion coming from Amazon Web Services. G42, an Emirati artificial-intelligence company that’s working with a California startup to build its own Nvidia-level microchips, just signed a $1.5 billion deal with Microsoft. In June, the company’s CEO, Satya Nadella, was seen meeting with Sheikh Tahnoon bin Zayed, the UAE’s national security adviser and head of G42. In April, OpenAI’s Sam Altman visited the UAE to court Saudi money to fuel more investment in data centers, chips, and energy infrastructure to train AI, as well as develop a special AI-enabling semiconductor chip as part of a project code-named “Tigris.”

And Gulf countries aren’t just attracting capital. They’re bringing in a skilled workforce from existing tech hubs — Google, Amazon, and Microsoft are all investing in Middle Eastern headquarters — and training and expanding domestic talent. They’re also already making serious headway in local technology development. Abu Dhabi has formed two AI-focused cloud companies called Core42 and AI71, which work with the homegrown Falcon AI model, an open-source, large-language model that outperforms Meta’s.

All of this only plays more into the idea of creating a data hub in the Middle East. It’s already a nucleus of digital cables; that’s why the region around Muscat, the capital of Oman, is one of the more connected places on Earth, as far as undersea cables go. And big players in the region will be poised to spread internet infrastructure to neighboring North Africa and the rest of the continent, both fast-growing regions with poor digital connectivity. Core42 has a project underway with VAST, a data platform provider, looking to expand its AI-focused data center network globally.

Gulf countries aren’t just attracting capital — they’re bringing in a skilled workforce from existing tech hubs and training and expanding domestic talent.

But it’s safe to say the comparison between data and oil isn’t only monetary. All of this energy-intensive data-center growth will generate extensive carbon emissions. The International Energy Agency found data-center power demand, which currently accounts for 1.5% of global energy usage, will double by 2026, when the sector will use as much energy as the country of Japan. There have been some positive signs: the Moro Hub data center, the world’s largest solar-powered data center, opened in Dubai last year, and regional developers like Khazna have spoken about more sustainable developments. But large-scale solar and wind deployment for regional data centers is still in the works, Almashharawi said. The industry “is basically hydrocarbon for the time being,” he said.

Whatever the environmental effects are, the data gold rush is poised to pay off — for now. A PricewaterhouseCoopers study estimates AI will contribute $96 billion to the UAE’s economy and $135 billion to Saudi Arabia’s economy by 2030; only China and North America are expected to receive greater economic impact from AI. The rivalry between the UAE, which aims to create a $100 billion AI fund, and Saudi Arabia, which wants to partner with Andreessen Horowitz to create a $40 billion fund, has also sparked an investment race for more data centers. Damac, a UAE developer, committed last year to building its first data center in Malaysia, with plans to construct more facilities across southeast Asia and Africa. Much like oil, data has a global marketplace, and Middle East investors are all too happy to be key players in selling the fuel of the modern economy.

Patrick Sisson is a reporter covering cities, technology, and business.

Tom Jones6/24/26

Prime Day is here again and Amazon’s subscription service has never been more popular

Well, it’s that time of year again: many have made their wish lists, people are scraping together the money they’ve saved to pick out a perfect gift, some are presumably leaving out refreshments for the weary delivery drivers and, more and more, drones.

It’s Amazon Prime Day — meaning that it’s the second day of the four-day promotional event that Amazon still calls Prime Day — of course, and it’s even come early this year, with the company bringing the period into late June from July, when it’s been traditionally held for the last five years.

The Prime Age

Alongside the eyes and endless clicks that the arbitrary stream of listicles on “The Best Prime Day Deals” that almost every media outlet pours into, Amazon will also be cheering the fact that there’s now more Prime users than ever before to devour the retailer and its sellers’ sometimes-contested “discounts.” Indeed, according to the latest annual estimates from Consumer Intelligence Research Partners (CIRP), there were just over 200 million American shoppers using Amazon’s massive subscription service at the end of 2025.

Max Knoblauch6/15/26

Electronic Arts launches a platform to put more ads in its games

Video game publishing giant EA launched a new platform on Monday designed to make the process of selling immersive ad space in its popular games easier.

The company says the platform, called EA Advertising, allows brands to “integrate directly into gameplay through dynamic, real-time placements, from stadium signage to custom in-game content.”

More so than other studios, EA has incorporated advertising into its most popular titles. As Kotaku points out, the company’s ad efforts stretch as far back as 2006. Several of its sports franchises already feature partnerships with brands like Visa, Lowe’s, Red Bull, and PepsiCo.

In-game advertising hasn’t exactly been embraced by fans, but industry experts expect it to ramp up as companies seek more revenue to offset higher games budgets and surging memory costs. EA rival Take-Two has taken a different approach, with CEO Strauss Zelnick recently saying the company was “not at risk of doing brand partnerships” in the forthcoming “Grand Theft Auto VI,” and that ads in full-price games seems “unfair.”

The $55 billion deal to take EA private, led by Saudi Arabia’s Public Investment Fund, is set to close at the end of this month. Being the largest leveraged buyout in history, EA will likely look for more ways to boost revenue to cover interest payments.

Electronic Arts Makes Push for Ad Dollars Tied to Sports

Millie Giles6/11/26

JM Smucker says it sold $1 billion worth of Uncrustables in FY2026

After years of booming sandwich sales, JM Smucker has finally earned a billion-dollar crust.

On Tuesday, the company reported results for fiscal year 2026, highlighting better-than-expected profits driven by higher prices for coffee and sweet baked goods. However, at another point on the earnings call, CEO Mark Smucker pointed to one particularly jammy figure: in line with previous forecasts, the company sold $1 billion worth of its (almost always) crustless sandwiches, Uncrustables, in the last year alone.

Max Knoblauch6/8/26

Paramount reportedly offers concessions to resolve multistate antitrust investigation

Paramount has reportedly offered up some concessions in an effort to prevent an antitrust lawsuit by California and about 10 other states, according to Bloomberg reporting on Monday.

Reuters first reported on the potential suit from a group of unnamed states last week, which could throw a wrench in Paramount’s plans to buy rival Warner Bros. Discovery in a Hollywood megamerger.

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

Paramount Offers Concessions to Head Off State Antitrust Lawsuit

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

$98B ⛽

Max Knoblauch6/8/26

The IATA released its latest financial outlook for the airline industry over the weekend, forecasting a $98 billion jump in the sector’s collective fuel bill. The world’s largest trade group representing airlines expects the oil spike to halve profits by 49% from last year to $23 billion.

The group also expects profit margins to halve year over year, falling from 2025’s 4.2% to 2%. Still, revenue is expected to climb to $1.17 trillion from $1.07 trillion.

A surge in the cost of jet fuel has rocked US and global airlines this year, leading Delta Air Lines, United Airlines, American Airlines, Southwest Airlines, JetBlue, and others to raise fares and ancillary charges like bag fees. Low-cost carriers, which operate on smaller margins, have been squeezed the hardest, resulting in Spirit’s shutdown.

“It’s a tough year for all airlines, especially those whose balance sheets had not yet recovered from COVID. And, of course, for those operating in the Gulf,” said IATA Director General Willie Walsh, who added that demand is holding up and about half of passengers expect to spend more on travel this year. “That bodes well for a strong northern summer peak season. The big unknown is how long travelers and shippers can tolerate the higher costs of connectivity.”