KKR and Dubai’s Gulf Data Hub to invest more than $5bn to grow region’s data centre capacity

US private equity firm will also acquire stake in GDH

By Alvin R Cabral

Global private equity firm KKR and Gulf Data Hub are teaming up to invest more than $5 billion to boost the Dubai company's data centre infrastructure in the Gulf, as demand for capacity grows amid a technology boom.

It will be New York-based KKR's first such investment in the region, with the company also acquiring a stake in GDH for an undisclosed amount, the companies said in a statement on Friday.

KKR's investment will be made through its infrastructure business, which has $77 billion worth of assets under management, according to its website. The company has total AUMs of about $624 billion, as of September 2024.

The agreement was signed in the presence of Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, and Omar Al Olama, Minister of State for AI, Digital Economy and Remote Work Applications, who noted that the UAE's moves to boost its technology capabilities set a "global benchmark for innovation and progress".

"Through groundbreaking initiatives and strategic investments, the UAE is shaping a future where technology enhances lives, fuels economic prosperity and unlocks boundless opportunities," Mr Al Olama said.

GDH has seven data centres across the UAE and Saudi Arabia. More are planned in Kuwait, Qatar, Bahrain and Oman to support increasing data consumption driven by growing trends in digital connectivity, cloud and AI.

The investment with KKR will help the company to "significantly" increase its presence in the Gulf, carry out a "sizeable" pipeline of projects and support its international footprint, GDH said.

“The strategic partnership with KKR will enable us to leverage their deep expertise, positioning us to achieve our pan-regional ambitions and deliver on our mandate of being a partner and provider of choice," said Tarek Al Ashram, founder and chief executive of GDH.

Remote working trends, largely established in response to the Covid-19 pandemic, have led to increased data consumption, fuelling the adoption of cloud services. This has continued to grow in the Middle East because of technology-savvy, young consumers and an evolving digital landscape, underpinned by the efforts of governments to develop their economies.

It has also given data centre and cloud providers an incentive to tap into the potential offered by the region. Among the most notable global companies to invest in the region are Microsoft, Amazon, Oracle, IBM and Alibaba Cloud, which have all opened cloud and data centres.

The UAE has continued to strengthen its expertise and contribution to the data centre industry. Abu Dhabi's Khazna Data Centres, one of the industry's largest operators in the Middle East, is building a 100-megawatt data centre in Ajman. The site will be the company's biggest in the Emirates, and is expecting to nearly double to 850MW by 2029, chief executive Hassan Al Naqbi told The National last year.

n May, G42, the UAE AI company that is the parent of Khazna, announced it would build a geothermal energy-powered data centre in Kenya, in partnership with Microsoft.

“Today's digital assets form the backbone of our data-driven society ... as business requirements evolve, strategic investments ... will be crucial to harnessing the full potential of our digital future," Waldemar Szlezak, global head of digital infrastructure at KKR, said on Friday.

KKR has operated in the Middle East for more than 15 years, with offices in Dubai and Riyadh. Previous investments in the region include a partnership to create Adnoc Oil Pipelines.

KKR also acquired a portfolio of commercial aircraft from Etihad Airways in 2020 through Altitude Aircraft Leasing.