Wedoany.com Report-Nov. 6, Microsoft (MSFT.O) and Abu Dhabi's G42 announced on Wednesday a 200-megawatt expansion of data center capacity in the United Arab Emirates, forming part of an investment exceeding $15 billion by the U.S. technology firm in the Gulf nation.

A view shows a Microsoft logo at Microsoft offices in Issy-les-Moulineaux near Paris, France, March 25, 2024.

This growth will be implemented via Khazna Data Centers, a subsidiary of G42, with operations anticipated to commence before the close of 2026, as outlined in a collaborative declaration from the organizations, though additional specifics were not disclosed.

Microsoft indicated earlier this week that its financial commitments in the UAE will total $7.3 billion from 2023 through the end of 2025, complemented by another $7.9 billion allocated for the 2026-2029 timeframe.

The company also revealed that the administration under President Donald Trump has authorized the shipment of sophisticated Nvidia (NVDA.O) processors for use in its UAE-based data facilities, supporting the nation's substantial expenditures aimed at establishing itself as a key center for artificial intelligence worldwide.

In the prior year, Microsoft allocated $1.5 billion to acquire a minority interest in G42, an entity further supported by private equity group Silver Lake, the Abu Dhabi sovereign wealth fund Mubadala, and the investment office of prominent financier Ray Dalio.

The initiative will deliver enhanced artificial intelligence and cloud computing resources to the UAE, "strengthening Microsoft Azure's secure, scalable, and sovereign cloud services," according to the joint statement from the two companies on Wednesday.

This collaboration underscores a deepening alliance between Microsoft and G42, focused on advancing digital infrastructure in Abu Dhabi and beyond. By leveraging Khazna's established facilities, the project aligns with broader efforts to meet rising demands for high-performance computing in the region. The addition of advanced Nvidia components will enable more efficient processing for AI applications, from machine learning models to data analytics, benefiting sectors such as healthcare, finance, and energy.

G42's diverse investor base provides a stable foundation for such expansions, combining local expertise with international capital. Mubadala's involvement, for instance, reflects the UAE's strategic emphasis on technology self-sufficiency and innovation. Similarly, Ray Dalio's participation highlights the appeal of G42's model to global investors seeking opportunities in emerging tech ecosystems.

Microsoft's phased investment approach demonstrates a long-term vision for the UAE market, where cloud adoption has accelerated amid digital transformation initiatives. The $15.2 billion total pledge, spanning multiple years, positions the country to host more sovereign data operations, ensuring compliance with regional regulations on privacy and security.

Experts note that this development could spur job creation in technical fields, with Microsoft committing to train one million individuals in the UAE by 2027 through programs in AI and cloud skills. Joint ventures like the Responsible AI Future Foundation, involving G42 and Mohamed bin Zayed University of Artificial Intelligence, further promote ethical practices in technology deployment.

As the UAE invests billions in AI infrastructure, partnerships like this one facilitate knowledge transfer and capacity building. The data center upgrade will support scalable solutions for enterprises, allowing seamless integration of Azure services while prioritizing data residency. Overall, the announcement signals robust confidence in the Gulf's potential as a hub for next-generation computing, fostering economic diversification and technological resilience. Through these efforts, both firms aim to drive inclusive growth, empowering businesses and communities with cutting-edge tools for the digital era.