meed-logo

line1 line2 line3
SIGN IN / REGISTER

DeepSeek complicates regional data centre choices

29 January 2025

Commentary
Jennifer Aguinaldo
Energy & technology editor

Register for MEED’s 14-day trial access 

DeepSeek, a Chinese-developed free artificial intelligence (AI)-powered chatbot, shot to fame over the past week.

According to users, it looks, feels and works very much like ChatGPT, the generative AI developed by US-based Open AI.

In addition to becoming a feasible option for those willing to try the app for work or fun, DeepSeek is understood to have been trained at a fraction of the cost – around $6m – compared to an estimated $100m for the latest version of ChatGPT.

The BBC has reported that DeepSeek’s founder, Liang Wenfeng, built up a store of Nvidia A100 chips, which have been banned from export to China since September 2022.

His collection, which some estimate has reached 50,000, helped his company build a powerful AI model by pairing these chips with cheaper, less sophisticated ones.

US officials have warned of the app’s security loopholes, while critics have pointed out that DeepSeek’s training parameters omitted events that took place in Tiananmen Square in 1989.

Nevertheless, the hardware architecture behind DeepSeek presents a crossroads for the region’s data centre operators, assuming US President Donald Trump does not overturn a new regulation restricting access to US-made advanced AI chips outside its closest allies.

Over $10.6bn-worth of data centres, some catering to hyperscalers such as Amazon Web Services and Microsoft, are planned to be developed and built across the GCC states, according to the latest available data from MEED Projects.

This is a conservative estimate, given potential investments such as the $5bn planned between US asset investment firm KKR and the UAE-based Gulf Data Hub.

It also excludes spending by government entities to develop AI capabilities in defence, security, healthcare and, plausibly, energy.

The new regulation implies that the GCC states are categorised as mid-ter countries, which means exports of 50,000 graphics processing units (GPUs) will apply between 2025 and 2027.

Individual companies from these countries will only be able to achieve higher computing capability if they comply with US regulations and obtain validated end user status.

A policy creating a scarcity of advanced chips may backfire and have the unintended consequence of driving less developed economies to be more efficient, as DeepSeek has demonstrated.

Pairing these powerful, expensive chips with more affordable ones sourced elsewhere to drive AI development is an option that is now on the table – not just in China but closer to home as well.  

Related read: AI chip restriction may slow down GCC data centre boom

READ MEED’s YEARBOOK 2025

MEED’s 16th highly prized flagship Yearbook publication is available to read, offering subscribers analysis on the outlook for the Mena region’s major markets.

Published on 31 December 2024 and distributed to senior decision-makers in the region and around the world, the MEED Yearbook 2025 includes:

> GIGAPROJECTS INDEX: Gigaproject spending finds a level
https://image.digitalinsightresearch.in/uploads/NewsArticle/13346430/main.jpg
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Saudi Arabia sets July deadline for Taif International airport

    7 July 2026

     

    Saudi Arabia’s Matarat Holding, in collaboration with the National Centre for Privatisation & PPP (NCP), has set a deadline of 24 July for a contract to develop the new Taif International airport project in Mecca Province.

    The client has opted for a 30-year build-transfer-operate (BTO) contract model, including the construction period.

    In January, MEED reported that four consortiums and one standalone company had been prequalified to proceed to the next stage of the bidding process.

    These were:

    • Kalyon Insaat / AlBawani (Turkiye/local)
    • Mada International Holding / TAV Airports (local/Turkiye)
    • Tamasuk / Bengaluru International Airport (local/India)
    • Vision Invest / Asyad / DAA International (local/local/Ireland)
    • GMR Airports (India)

    The new Taif International airport will be located 21 kilometres southeast of the existing Taif airport and will have a capacity of 2.5 million passengers by 2030.

    In addition to a new airport terminal, the proposed design features a runway with a full-length parallel taxiway connecting to a single commercial apron.

    The scope includes facility buildings, utility networks, car parks and access roads, as well as provisions for additional expansions to meet future subsystem requirements.

    The new airport is expected to meet the projected increase in demand by 2055 and contribute to the economic development of the city of Taif and its surrounding areas, in line with the kingdom’s National Aviation Strategy.

    It is also expected to meet the needs of Umrah pilgrims, as an alternative within the region’s multi-airport system, which includes King Abdulaziz airport in Jeddah, Prince Mohammed Bin Abdulaziz airport in Medina and Prince Abdulmohsen Bin Abdulaziz airport in Yanbu.

    Previous tenders

    The Taif, Hail and Qassim airport schemes were previously tendered and awarded as public-private partnership (PPP) projects using the BTO model.

    Saudi Arabia’s General Authority of Civil Aviation (Gaca) awarded the contracts to develop four airport PPP projects to two separate consortiums in 2017.

    A team of Turkiye’s TAV Airports and the local Al-Rajhi Holding Group won the 30-year concession agreement to build, transfer and operate airport passenger terminals in Yanbu, Qassim and Hail.

    A second team, comprising Lebanon’s Consolidated Contractors Company, Germany’s Munich Airport International and local firm Asyad Group, won the BTO contract to develop Taif International airport.

    However, these projects stalled following the restructuring of the kingdom’s aviation sector.

    Saudi Arabia has already privatised airports including the $1.2bn Prince Mohammed Bin Abdulaziz International airport in Medina, which was developed as a PPP and opened in 2015.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17574264/main2939.jpg
    Yasir Iqbal
  • KBR wins Iraq pipeline contract

    7 July 2026

    US-based KBR has been awarded a consultancy contract for a planned pipeline project that will extend from Basra in the south of Iraq to Haditha in Al-Anbar Governorate.

    Iraq’s cabinet, which met under Prime Minister Ali Al-Zaidi, has approved the award, according to a cabinet statement.

    State-owned Basra Oil Company (BOC), which manages the majority of Iraq’s southern oil fields, is now expected to sign a contract with KBR for the project.

    In April, Iraq announced the allocation of $1.5bn for the project, which is part of a larger scheme, estimated to be worth $5bn.

    The wider project includes additional pipeline links that will extend to Kirkuk in Northern Iraq and to Jordan.

    Earlier in July, Iraq's cabinet approved BOC signing a ​heads of agreement and a non-disclosure agreement with a consortium of companies to explore possible future oil pipeline projects, including the Basra-Haditha connection.

    The consortium includes US-based companies Chevron and TI Capital, as well as Qatar’s UCC.

    The consortium will prepare technical and financial feasibility studies for strategic export pipeline projects, according to a statement from Iraq’s cabinet.

    In June, Prime Minister Ali Al-Zaidi and US Special Presidential Envoy Tom Barrack agreed to advance the memorandum of understanding with TI Capital to rehabilitate a disused pipeline that extends from Kirkuk to Baniyas in Syria.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17570453/main.jpg
    Wil Crisp
  • Oman outlines grid plan for four 1GW solar IPPs

    7 July 2026

    The Oman Electricity Transmission Company (OETC) has outlined the planned grid connection schedule for four 1GW solar independent power projects (IPPs) that will support the sultanate's renewable energy expansion through 2030.

    The projects are detailed in OETC's Five-Year Annual Transmission Capability Statement (2026-30), which sets out the transmission infrastructure required to integrate new generation capacity into the national grid.

    According to the report, the first of the four gigawatt-scale projects, the Adam solar IPP, is scheduled for integration in 2028.

    Oman’s Nama Power & Water Procurement Company (Nama PWP) issued a request for qualification for the development of the Adam solar IPP in June.

    OETC said it expects the 1GW Al-Kamil 2 solar project to be integrated in 2030 through the planned Sadaf 400kV grid station. The 1GW Dhofar solar IPP and 1GW Mahadha solar IPP are also scheduled for integration in 2030.

    Before the gigawatt-scale projects are connected, several smaller utility-scale solar schemes are expected to enter service.

    The first is the 500MW Ibri 3 solar project, supported by the Al-Sebkha 400kV switching station. Construction began on Ibri 3 in January.

    The report says this will be followed by the Al-Kamil 1, Sinaw and Marsa solar IPPs.

    The power purchase agreement for the 500MW Al-Kamil IPP was recently signed by a separate consortium comprising France's EDF Power Solutions, Oman National Engineering & Investment Company and the local OQ Alternative Energy.

    Nama PWP has issued a supervisory consultancy tender for the 280MW Marsa IPP in North Al-Batinah Governorate, with a bid submission deadline of 26 July.

    The transmission statement says about 70 transmission projects are expected to enter service between 2026 and 2030.

    The programme is intended to increase transmission capacity, connect new renewable generation, strengthen grid reliability and support electricity demand growth across the sultanate.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17564537/main.jpg
    Mark Dowdall
  • Frontrunner emerges for Bahrain’s Al-Hidd IWP

    6 July 2026

     

    Saudi Arabia's Acwa has emerged as the frontrunner for a contract to develop and operate Bahrain’s Al-Hidd independent water project (IWP) following the disqualification of the only other bidder for the plant, a source has told MEED.

    The seawater reverse osmosis (SWRO) plant is the state's first IWP project. It is expected to have a production capacity of about 60 million imperial gallons a day (MIGD), equivalent to roughly 272,000 cubic metres a day of potable water.

    Acwa offered to develop the project at a levelised cost of water of BD0.276 ($0.73) a cubic metre, according to details published on Bahrain’s Tender Board on 2 July.

    GS Inima (South Korea/Spain) was the only other bidder for the project.

    Bids for the project had been submitted earlier this year.

    The source added that Acwa's financial bid is now under evaluation and has yet to be selected as the preferred bidder. This will only be determined "subject to compliance with the [request for proposal] requirements".

    Nine companies and consortiums had previously been shortlisted following the completion of the prequalification process last August.

    The facility will be developed on a brownfield site and is expected to be fully operational by 2029. It will be developed using a build, own and operate (BOO) model for 20-25 years and aims to help expand Bahrain’s water infrastructure to meet projected demand based on its 2030 masterplan.

    This includes doubling the state's installed power generation capacity to over 10GW by 2030, according to UK data analytics firm GlobalData.

    Sitra IWPP

    Bahrain's 1.2GW Sitra independent water and power plant (IWPP) project is also advancing, with two bids having been submitted for the plant in June.

    The offers were made by Acwa and Abu Dhabi National Energy Company (Taqa). The technical element of the bid was opened on 18 June.

    The Sitra IWPP is a combined-cycle gas turbine plant and is expected to have a production capacity of about 1,200MW of electricity. The project’s SWRO desalination facility will have a production capacity of 30 MIGD of potable water.

    The plant is Bahrain’s fourth IWPP, replacing the previously planned Al-Dur 3. The Sitra IWPP is expected to be fully operational by the second quarter of 2029.

    The Bahraini Electricity & Water Authority’s transaction advisory team for the two BOO projects comprises KPMG Fakhro as the financial consultant and Trowers & Hamlins as the legal consultant.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17562089/main.jpg
    Mark Dowdall
  • Contractor begins Burj Khalifa metro station expansion works

    6 July 2026

     

    Dubai’s Roads & Transport Authority (RTA) has started construction on the expansion and upgrade of the Burj Khalifa/Dubai Mall metro station.

    The main construction works are being carried out by Turkish contractor Mapa Group.

    The RTA also announced that it is temporarily closing its bus and taxi service road at the metro station due to ongoing construction works, until the end of this year.

    The contract was tendered in January 2025, as MEED exclusively reported.

    The design-and-build contract covers the lift and station expansion works, including demolishing and replacing the existing pod entrance with a three-storey building. The new entrance will provide links to the Dubai Mall link bridge at the concourse level and a direct connection to the Rashidya platform.

    The project will add three new hydraulic lifts and four escalators. The concourse level will be expanded to include a connection to the link bridge and 10 new retail units.

    The project will also add two new hydraulic lifts and escalators within the Sheikh Zayed roadside extension serving the UAE Exchange platform.

    The Burj Khalifa/Dubai Mall station expansion was first tendered as part of the RTA’s plan to upgrade four Dubai Metro stations in 2018.

    Subsequently, the expansion works on the station were put on hold, whereas construction on the Damac, UAE Exchange and Dubai Internet City stations was completed in 2021.

    Local firm Al-Shafar General Contracting undertook the expansion works.

    Traffic at the Burj Khalifa/Dubai Mall station peaks on New Year’s Eve. In an official statement published by Emirates News Agency, the RTA said that last New Year’s Eve, Dubai Metro accommodated over 1 million passengers on its Red and Green lines, while the Dubai Tram transported 55,391 passengers.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17563784/main0706.png
    Yasir Iqbal