Microsoft and G42 are expanding their strategic partnership with a 200MW increase in datacenter capacity in the UAE, a move aimed at supporting the country’s digital transformation and AI infrastructure ambitions. The expansion will be delivered through Khazna Data Centers, a subsidiary of G42, and is expected to begin coming online before the end of 2026.

The announcement forms part of Microsoft’s $15.2 billion investment in the UAE and deepens its collaboration with G42, described as an international neocloud provider. The added capacity is intended to strengthen Microsoft Azure’s secure, scalable, and sovereign cloud services in the country.

Strengthening AI and Sovereign Cloud Infrastructure

The 200MW expansion will add AI and cloud infrastructure designed to support public sector organizations, regulated industries, and enterprises. Microsoft said advanced GPUs and AI capabilities will help organizations innovate, scale, and operate with greater agility and resilience.

The partnership also aligns with the UAE’s national digital economy strategy, which aims to double the digital economy’s contribution to GDP over the next decade. For enterprise and public sector leaders, the expansion is positioned as infrastructure for AI adoption, data protection, cybersecurity, and sovereign cloud services.

Responsible AI and Local Talent

Microsoft and G42 said the expansion is underpinned by a shared commitment to cybersecurity, data protection, and ethical AI. The Responsible AI Future Foundation (RAIFF), established through a partnership between Microsoft, G42, and MBZUAI, is presented as part of that governance framework.

“This expansion is more than datacenters. It’s about powering the UAE’s future. By combining Microsoft’s global expertise with G42’s local leadership and broadening role as an international neocloud enterprise, we’re building the foundation for innovation that will bring new opportunities to people across the country,” said Brad Smith, Vice Chair and President of Microsoft.

The companies said the expansion also supports Microsoft’s commitment to skill one million people in the UAE by 2027. Their partnership has already established the Global Engineering Development Center and the AI for Good Lab in Abu Dhabi while continuing work with government and educational institutions to expand access to AI, cloud, and digital skills.

Why It Matters

“Our partnership with Microsoft advances our mission to build the Intelligence Grid, the interconnected infrastructure for intelligence designed to empower people, industries, and nations in the AI era. 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,” said Peng Xiao, Group CEO of G42.

The expansion reinforces Microsoft and G42’s broader effort to build digital infrastructure around trust, technology, and talent in the UAE. It also builds on earlier joint initiatives, including the RAIFF and AI research centers in Abu Dhabi, as the companies work to support cloud, AI, and digital services across the country.