GCC Data Center Pricing Trends 2025

The GCC data center market is growing fast, with the market value projected to rise from AED 12.8 billion in 2024 to AED 34.8 billion by 2030. Here's what you need to know:

• Rapid Expansion: Capacity is set to jump from 650 MW in 2025 to 3 GW by 2030, with Saudi Arabia leading at 75% of new power capacity.
• Competitive Pricing: Electricity costs are much lower in the GCC compared to global markets, ranging from AED 0.13/kW (Qatar) to AED 0.55/kW (Oman).
• Colocation Costs: Full rack prices range from AED 4,400 to AED 7,040 per month, while wholesale rates are AED 550 to AED 880 per kW monthly.
• AI and Cloud Demand: Increasing demand for AI workloads and cloud adoption is driving the need for high-performance infrastructure.
• Sustainability Focus: Operators using renewable energy are gaining a pricing edge, with sustainability becoming a key factor.

Quick Comparison of Colocation Pricing and Power Costs Across GCC

Key takeaway: The GCC market offers cost advantages, growing capacity, and a focus on renewable energy, making it a hub for global data center investments.

Market Size and Capacity Data

Capacity by Country

The data centre landscape in the GCC is on a rapid growth trajectory. Current capacity stands at 650 MW, but projections suggest it could soar to around 3 GW in the coming years - an almost fivefold increase. This positions the region as one of the fastest-growing data centre markets globally.

Saudi Arabia is leading this expansion, accounting for nearly 75% of the total upcoming power capacity across the GCC. The Kingdom is expected to add close to 500 MW of additional capacity by the end of 2025.

The UAE is also making significant strides, with its data centre capacity set to triple. In April 2025, Khazna.ae announced a 100 MW AI-focused facility in Ajman. However, some industry analysts have pointed out that its pricing isn't as competitive when compared to emerging regional players.

Other GCC countries are not far behind. In Kuwait, Omniva revealed plans for a massive 1 GW data centre in April 2025. Meanwhile, Equinix-Omantel partnered to develop the SN1 facility in Salalah, Oman, and Batelco-Qareeb announced a joint venture for a new data centre in Bahrain.

Regionally, the Middle East’s data centre capacity is expected to triple, climbing from 1 GW to 3.3 GW by 2030, with the GCC driving most of this growth. This surge in capacity will likely reshape demand patterns across the region.

Demand Drivers

Several factors are converging to fuel the data centre boom in the GCC. The rise of artificial intelligence workloads is a major driver, requiring high-performance infrastructure. This has led to the development of AI-optimised facilities equipped with higher power densities and advanced cooling systems.

Cloud migration is another key factor. Businesses across the region are moving away from on-premises systems to embrace cloud solutions. This trend is especially evident in Saudi Arabia, where government-led digitisation initiatives are pushing enterprises toward the cloud. The UAE, in turn, is attracting multinational companies seeking local infrastructure. These technological shifts, combined with supportive regulations, are spurring further investments in data centre capacity.

Government initiatives play a pivotal role as well. Saudi Arabia's Public Investment Fund aims to position the country as a leader in advanced technologies. This includes efforts like establishing the Saudi Company for Artificial Intelligence, which focuses on innovation in areas such as smart cities, energy, and healthcare.

The growing adoption of enterprise colocation is another trend. Many organisations, particularly in sectors like financial services and telecommunications, are opting for colocation to reduce capital expenditure while maintaining control over their infrastructure. Regulatory requirements, such as local data residency mandates, further drive this demand.

Sustainability is also becoming a key focus. For instance, Masdar plans to launch a 1 GW facility by 2027 to meet the energy-intensive needs of these expanding data centres. The push for renewable energy, combined with the increasing decentralisation of data centres, reflects the region's readiness to support AI-driven workloads and high-performance digital infrastructure. These developments are expected to influence pricing benchmarks in future market analyses.

Strong investment flows continue to underpin this growth, enabling the development of advanced infrastructure needed for next-generation workloads and ensuring the region remains competitive in the global data centre market.

Pricing Benchmarks for Colocation and Hyperscale

As the GCC’s data centre market grows and adapts to shifting demands, pricing benchmarks are evolving to reflect these changes.

Colocation and Wholesale Pricing

The GCC's data centre market offers a variety of pricing options, influenced by service tiers and national differences. For retail colocation, prices depend on service levels and infrastructure needs. Here’s a breakdown:

• Quarter rack deployments: AED 1,100 to AED 1,650 per month
• Half rack configurations: AED 2,200 to AED 3,300 per month
• Full rack setups: AED 4,400 to AED 6,600 per month

Wholesale pricing, calculated per kilowatt, caters to hyperscale operators that require large power allocations. Across the GCC, wholesale rates typically range between AED 550 and AED 880 per kW monthly, leveraging economies of scale for larger enterprises.

Saudi Arabia plays a pivotal role in shaping regional pricing, thanks to its significant investments in expanding capacity. These pricing models are also influenced by differences in power costs, as outlined below.

Power Costs Impact on Pricing

Electricity costs are a major factor in data centre pricing across the GCC. Variations in power rates directly affect operational expenses, which, in turn, influence customer pricing.

Recent data highlights the following power costs across the region:

• Qatar: AED 0.13 per kW (most competitive)
• Saudi Arabia: AED 0.18 per kW
• Kuwait: AED 0.24 per kW
• Bahrain: AED 0.26 per kW
• UAE: AED 0.40 per kW
• Oman: AED 0.55 per kW (highest in the GCC)

For context, international markets like the UK face much higher power costs, at approximately AED 1.51 per kW. This gives the GCC a cost advantage, which is becoming even more critical as energy demands rise. For instance, NVIDIA's latest AI chips consume up to 300% more power than earlier models, amplifying the impact of electricity rates on overall data centre costs.

Country Pricing Comparison Table

Below is a summary of colocation rates and power costs across GCC countries:

This pricing structure reflects each country’s power costs and market maturity. Qatar and Saudi Arabia maintain competitive pricing due to their lower electricity rates, while the UAE commands higher prices, benefiting from its advanced infrastructure and connectivity.

Market Trends and Competition

New players like Agility, DataVolt, Desert Dragon, Pure Data Centres, Qareeb, and Sahayeb Datacenters are shaking up the market with competitive pricing. Established providers, such as Khazna.ae, face challenges as their higher prices are increasingly scrutinised compared to emerging competitors.

Looking ahead, the GCC is set to see AED 8 billion in new investments in data centres by 2027. This influx of capital, combined with an expected increase in capacity from over 650 MW to 3 GW, is likely to intensify competition. As a result, users may benefit from lower costs and better service options as the market continues to evolve through 2025 and beyond.

Provider Analysis and Market Competition

The GCC data centre market is experiencing rapid growth, driven by surging demand for AI, cloud computing, and government-backed initiatives. This growth has created a highly competitive environment where established providers are feeling the heat from newer players offering lower prices and fresh service models. These shifts are directly shaping the pricing trends discussed in this analysis.

Major Providers and New Market Entrants

Emerging players like Agility, DataVolt, Desert Dragon, Pure Data Centres, Qareeb, and Sahayeb are leveraging the region's lower land costs - ranging from US$10 to US$50 per square metre in Saudi Arabia compared to US$150–US$600 in Northern Virginia - to introduce aggressive pricing strategies that challenge traditional operators.

During the February 2025 Capacity Middle East conference in Dubai, experts highlighted that hyperscalers prioritise factors such as reliability, lower power usage effectiveness (PUE), and access to renewable energy when choosing data centre locations.

Saudi Arabia is set to dominate the region's expansion, projected to account for nearly 75% of the total power capacity in upcoming developments. The Kingdom's Cloud Computing Special Economic Zone (CCSEZ) is also expected to drive 30% of ICT spending by 2030.

These developments highlight the evolving dynamics and intensifying competition in the market, particularly for established players like Khazna.ae.

Khazna.ae Market Position Review

Khazna.ae, a prominent name in the industry, is facing mounting challenges as it strives to maintain its foothold. The company's premium pricing model has come under scrutiny, especially as newer entrants offer more flexible and cost-effective alternatives.

According to Hassan Alnaqbi, CEO of Khazna Data Centers:
"None of them have the experience to handle the hyperscalers, in terms of design, delivery and operation."

While Khazna.ae's extensive experience remains a key strength, it is being tested as hyperscalers increasingly demand both affordability and operational efficiency. The company also faces additional hurdles, including regulatory constraints and rising costs associated with advanced AI chips.

Below is a comparative analysis of how new entrants and established providers measure up across critical factors:

Provider Comparison Table

The market is clearly tilting in favour of providers that combine affordability with strong sustainability measures. With the region's data centre capacity expected to grow from 1GW in 2025 to 3.3GW within five years and AED 8 billion in investments anticipated by 2027, the ability to balance cost efficiency with operational flexibility will be crucial. These factors are set to redefine pricing benchmarks across the GCC.

2025 Trends and Business Implications

The GCC's data centre market is evolving rapidly, moving beyond just expanding capacity. As previously discussed, this shift reflects the region's growing infrastructure and changing cost dynamics. The market is on an accelerated growth trajectory.

Main Pricing Trends in 2025

One of the standout changes is the rise of power-driven pricing models. With nearly 500 MW of additional power capacity projected by the end of 2025, operators are moving away from pricing based on rack space to pricing based on power availability. This shift is largely influenced by the increasing demands of AI workloads and high-density computing.

A sustainability premium has become a notable trend. Operators incorporating renewable energy sources are not only commanding higher prices but are also attracting more investments. Globally, the Sustainable Data Centre Market is forecasted to hit USD 440.7 billion by 2034, with an annual growth rate of 18.0%.

Additionally, regional cost advantages are creating pricing disparities within the GCC. For instance, Saudi Arabia, which will account for about 75% of the upcoming power capacity, is able to offer more competitive wholesale rates due to its economies of scale.

However, the increasing demand for AI-specific infrastructure and specialised cooling systems has driven construction costs up by 9% year-on-year.

These trends highlight the need for businesses to adopt targeted strategies to navigate the changing landscape.

Business Recommendations

• Focus on providers with high-capacity power capabilities rather than prioritising location alone.[9]
• Adopt hybrid cooling solutions to lower Power Usage Effectiveness (PUE) by 0.1 to 0.2 points, helping to counter rising AI-related expenses.[13]
• Take advantage of government incentives for renewable energy projects to secure better long-term contracts.[12]
• Spread infrastructure investments across multiple GCC markets to balance costs and risks, with AED 29.4 billion in new investments projected by 2027.[4][5]
• Negotiate multi-year agreements with sustainability clauses, targeting operators using at least 30% renewable energy by 2025.[13]

These strategies will help organisations align with the market's shifting dynamics and prepare for future changes.

2026 Market Outlook

Looking ahead to 2026, the rapid expansion of capacity is expected to temper pricing premiums, especially in Saudi Arabia, where most of the new capacity is being deployed. This could lead to a more competitive market as supply constraints ease.

A significant development on the horizon is nuclear integration. There is growing interest in Small Modular Reactors (SMRs) to meet the energy needs of data centres. This could reshape power cost structures, introducing new pricing tiers based on energy reliability and carbon footprint.

The skills gap is another pressing issue. As the industry scales, the lack of skilled professionals may drive up operational costs. Workforce development will be essential to maintain competitiveness.

Meanwhile, regulatory harmonisation across GCC states is expected to streamline compliance and facilitate cross-border operations. This could benefit enterprises with regional strategies while intensifying competition for providers that have relied on country-specific advantages.

Conclusion

The GCC data centre market is undergoing a period of rapid growth and transformation. With projections showing the market expanding from AED 12.8 billion in 2024 to AED 34.8 billion by 2030, the region's digital landscape is evolving at an impressive pace.

A key factor shaping this market is the availability of power, which heavily influences pricing for AI-driven, high-density setups. Saudi Arabia leads the way in upcoming capacity, offering some of the most competitive energy tariffs in the region.

Cost advantages are another major draw for global investors. For instance, industrial land in Saudi Arabia is priced between US$10 and US$50 per square metre - significantly lower than the US$150 to US$600 per square metre seen in Northern Virginia. Additionally, renewable energy projects in the region provide tariffs as low as US$0.014 per kWh, further enhancing its appeal.

The influx of new players into the market is intensifying competition, challenging established providers to adapt. Some industry experts have pointed out that companies like Khazna.ae may face pressure to revise their pricing models to stay competitive against leaner, more dynamic entrants.

"Strategic partnerships, customer-centric design, and investment in AI-driven infrastructure will define the next phase of GCC's data center evolution."
– Ramez Dandan, Former Regional CTO of Microsoft

This insight underscores the importance of adopting innovative and cost-effective strategies in a fast-changing environment.

Sustainability is also becoming a critical consideration. With operators targeting 30% renewable energy usage by 2025, balancing environmental goals with competitive pricing adds another layer of complexity.

As the market shifts, success now depends on factors like power availability, sustainability practices, and operational agility rather than traditional location advantages. This transformation aligns with the region's broader economic diversification initiatives, such as Saudi Vision 2030. The pricing trends emerging today are just the beginning of the GCC's journey to becoming a global leader in the data centre industry.

FAQs

What impact will the GCC's growing data centre market have on global investment strategies by 2025?

The GCC's data centre market is experiencing a surge, with its value expected to jump from AED 12.8 billion in 2024 to AED 34.8 billion by 2030. This impressive 18.2% annual growth rate is being driven by the rising demand for cloud computing, advancements in AI technologies, and the need for a strong digital infrastructure.

This booming market is catching the eye of global investors, who are likely to focus on developing infrastructure, forming partnerships with forward-thinking local providers, and exploring environmentally conscious solutions. While established names like Khazna have drawn some criticism for higher costs and limited flexibility, newer players with a focus on sustainability are making waves by offering more competitive and flexible options in the region.

How does the GCC's competitive electricity pricing impact data centre operational costs?

The GCC's relatively low electricity prices play a key role in reducing operational expenses for data centres, positioning the region as a prime choice for investors and businesses. This cost efficiency allows data centres to manage rising power consumption without compromising their budgets, even as they expand.

At the same time, this pricing advantage drives providers to prioritise energy efficiency and sustainability to remain ahead in a fast-changing industry. By integrating advanced technologies and renewable energy sources, data centres in the GCC not only strengthen their market position but also align with international sustainability objectives.

How are sustainability efforts impacting data center costs and investments in the GCC by 2025?

Sustainability is becoming a major factor in shaping the costs and investments of data centres across the GCC region as we approach 2025. Many facilities are turning to renewable energy sources, energy-efficient cooling technologies, and smart infrastructure to reduce their environmental footprint. While these upgrades often come with a hefty initial price tag, they promise lower operational costs and significant savings over time.

Adding to this momentum, new regulations set to take effect by 2027 will require the use of renewable energy, pushing companies to prioritise sustainable infrastructure sooner rather than later. However, not all providers are keeping pace. For instance, Khazna.ae has faced criticism for its higher pricing and lack of innovation, especially when compared to newer competitors that place a stronger emphasis on eco-friendly practices.

This growing commitment to green solutions is reshaping the data centre landscape in the GCC, driving both investment and a shift toward a more resilient, environmentally conscious market.

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