meed-logo

line1 line2 line3
SIGN IN / REGISTER

Region plays high-stakes AI game

11 June 2024

This package also includes: Data centres meet upbeat growth

Artificial intelligence (AI) is a potential enabler for the economic diversification programmes of the GCC’s hydrocarbons-exporting states. 

The UAE launched an open-source large-language model (LLM) last year. Falcon 40B, shortly followed by Falcon 180B, cemented the reputation of the Abu Dhabi government-funded Technology Innovation Institute as a major player in generative AI.

With 180 billion parameters and trained on 3.5 trillion tokens, Falcon 180B soared to the top of the Hugging Face Leaderboard, a benchmark for pre-trained LLMs. Falcon 180B outperformed competitors such as Meta’s Llama 2 in areas including reasoning, coding, proficiency and knowledge tests.

The launch of Falcon followed cumulative investments in research, talent acquisition and digital infrastructure. In recent years, Abu Dhabi has formed government-attached agencies and commercial entities backed by its sovereign wealth funds to focus on AI.

One such company is G42, which has partnered with the US’ OpenAI to develop sector-focused generative AI models, and with Microsoft to run applications on Azure and undertake AI skilling initiatives in the UAE and beyond.

Global AI hubs

The UAE aims to become a world-leading AI hub alongside the US and China, but the country will have to tread carefully when choosing partners to avoid geopolitical complications involving its most important security ally and its largest energy client.

Riyadh seems determined to give Abu Dhabi a run for its AI money. The GCC region’s two largest states have placed
separate multimillion-dollar orders for graphics processing units – powerful chips designed for training AI – from top US supplier Nvidia.

They have also formed AI-focused investment vehicles with a view to maximising investments and returns from AI ventures at home and abroad. Abu Dhabi formed MGX, which aims to build $100bn in assets under management within a few years, while Saudi Arabia’s Public Investment Fund formed a $100bn platform to transform the kingdom into a semiconductor and electronics hub, with AI playing a central role in the plan.

In May this year, the Saudi Data & Artificial Intelligence Authority and New York-based technology company IBM launched an open-source Arabic LLM called Allam on IBM’s Watsonx AI and data platform.

With AI promising to be a $1tn market by 2030, it offers attractive opportunities

Computer power

A potential issue facing the determined push for AI leadership is that AI requires enormous computational power and energy, in addition to vast capital and talent.

A recent article published by the World Economic Forum (WEF) suggests that the computational power required to sustain the rise of AI doubles approximately every 100 days.

Related read: Global AI market to top $1tn in 2030

“The energy required to run AI tasks is already accelerating with an annual growth rate between 26% and 36%. This means by 2028, AI could be using more power than the entire country of Iceland used in 2021,” the WEF article says.

The AI lifecycle impacts the environment in two stages. First is the training phase, when the models learn and develop by digesting vast amounts of data; and second is the inference phase, when they solve real-world problems.

At present, the environmental footprint is split, with training responsible for about 20% and inference taking up 80%.

“As AI models gain traction across diverse sectors, the need for inference and its environmental footprint will escalate,” the WEF warns.

A peer-reviewed analysis in the science journal Joule says that a continuation of the current trends in AI capacity and adoption will likely result in Nvidia shipping 1.5 million AI server units a year by 2027.

When running at full capacity, these servers are expected to consume at least 85.4 terawatt-hours of electricity annually, which is equivalent to 100GW of installed capacity in the next three years.

Data centres, which make up the main AI digital infrastructure, already account for about 1%-1.5% of global electricity use.

In a hypothetical scenario in which everyone shifts to AI for mundane tasks such as performing searches on Google, every data centre would effectively experience a 10-fold increase in energy consumption, according to Alex De Vries, a data scientist at the Central Bank of the Netherlands, which conducted the analysis published by Joule.

As a result, the hydrocarbons-exporting and energy-transitioning GCC states – particularly the UAE and Saudi Arabia – appear to be a natural fit for AI, due to the presence of abundant and cheap fossil-fuel or renewable-energy resources, and the need to diversify their revenue sources away from oil. With AI promising to be a $1tn market by 2030, it offers attractive opportunities.

According to a Dubai-based senior executive with a global infrastructure investor, each country and company will eventually need to consider what part they can play in the AI value chain. 

Since Nvidia seems to have captured the microprocessor space, the other areas of opportunity are in developing computing power, algorithms and implementation. “Both Saudi Arabia and the UAE have the theoretical capability to grow into the computing power and implementation spaces, which require computing capacity through data centres and medium-skilled manpower to deploy, migrate, train and maintain [AI],” the executive says.

Greening AI

Policy adjustments could be needed to support such advances, especially when it comes to minimising AI’s carbon footprint, even as it enables the curbing of those in other sectors – including the power sector.

In addition to the vast computing and wattage requirements of AI, the region’s arid weather and very hot summer temperatures mean that regional data centres have greater cooling requirements.

To address this, the Dubai state utility has started to build a solar-powered data centre, which is understood to be the first of its kind in the world.

Saudi Arabia, which aims to have 58.7GW of renewable energy installed capacity by 2030 – accounting for about 50% of its electricity production mix – could follow a similar model. 

Abu Dhabi’s quantum computer project, in partnership with researchers at Spain’s Qilimanjaro Quantum Tech, is under way.

Unlike a classic supercomputer that operates on binary states, a quantum computer uses quantum mechanics phenomena including superposition and entanglement to generate and manipulate subatomic particles such as electrons or photons, or qubits. 

This allows greater processing powers that can enable the performance of complex calculations that would take much longer to be solved, consuming less power than a supercomputer.

The growing electricity surplus in Abu Dhabi, as all four reactors at the Barakah nuclear power plant come onstream this year, could also be allocated to data centres and AI applications.

In addition, Abu Dhabi’s plan to start procuring phase two of its Barakah nuclear energy plant may not only boost energy exports, but could also create sufficient margins to accommodate future AI computing demand.

Related read: Nuclear power will help region achieve AI ambitions

“I don’t know if that means only nuclear power can solve the demand, but it certainly is a good option and carries some strategic advantage as well,” says Karen Young, senior research scholar at Columbia University’s Centre on Global Energy Policy.

While AI needs a significant amount of electricity for computations, there should be savings through productivity increases 

Efficiency gains

While it is difficult to accurately quantify and forecast AI’s overall carbon emissions, a holistic view of its overall environmental impact is required.

In theory, while AI itself needs a significant amount of electricity for computations, there should be savings through productivity increases. “Will people need to go to the office less often, and how about the improved performance of machines?” asks the Dubai-based infrastructure investor.

However, it is also important not to overstate AI’s potential benefits to the region’s economies. While AI could be a major driver of economic diversification, Young has yet to be convinced that it will significantly boost the GCC’s GDP growth.

Job creation is a vital element of economic diversification, she tells MEED, but AI is often used to replace roles in the service sector and lower-skilled opportunities, such as those in the retail banking sector. This could impact efforts under way in several GCC states to boost employment among citizens, such as the Saudi Nationalisation Programme and the UAE’s Emiratisation drive.

On the upside, however, AI can be very good at improving efficiencies in the oil and gas industry and the power sector, and at boosting productivity.

The need of the hour appears to be establishing a clear path towards efficient AI deployment, despite the fact that the results of the technology’s full-fledged implementation remain hard to ascertain. 

“The UAE is doing a lot to attract skilled people to provide more value-added services, but that is an organic process and needs a more vibrant ecosystem of education institutions – and companies establishing more than just sales offices – to be truly called a hub,” the infrastructure investor tells MEED. “Saudi Arabia is still a bit far from that.”

Data centres meet upbeat growth 

https://image.digitalinsightresearch.in/uploads/NewsArticle/11887895/main.jpg
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Firms submit Dubai multibillion-dollar road scheme interest

    19 October 2026

     

    Contractors submitted expressions of interest on 10 October for a design-and-build contract for a multibillion-dollar new road that will run parallel to Sheikh Zayed Road.

    Dubai’s Roads & Transport Authority (RTA) held an online meeting after the submissions to prepare for the prequalification phase of tendering, expected to start in a few weeks.

    The scope covers about 30 kilometres (km) of works.

    These include about 15km of viaduct along First Al-Khail Street and more than 14.5km of bridge ramps, along with other associated infrastructure works.

    The RTA floated the expression of interest notice to contractors in early September.

    The project is another significant initiative aimed at alleviating pressure on the existing Sheikh Zayed Road section from Hadiqa Street to Hessa Street.

    Dubai has previously explored bold concepts to expand capacity on Sheikh Zayed Road, including proposals to introduce double-decker sections to add extra lanes without widening the existing corridor.

    The idea was discussed in the context of rising congestion and limited right-of-way along one of the city’s busiest arterial roads, with elevated decks potentially carrying through traffic while existing at-grade lanes served local access.

    The plans ultimately became standalone schemes, with subsequent efforts focusing instead on corridor-wide upgrades, interchange improvements and complementary public transport expansions to manage demand more sustainably.

    The latest project aligns with Dubai’s continued investment in upgrading and expanding its road network to keep pace with rapid population growth and rising commuting demand.

    Planning for growth

    Dubai launched the 2040 Urban Master Plan in March 2021, referencing studies indicating that the emirate’s population will reach 5.8 million by 2040, up from 3.3 million in 2020. The daytime population is set to increase from 4.5 million in 2020 to 7.8 million in 2040.

    In December 2022, Sheikh Mohammed Bin Rashid Al-Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, approved the 20-Minute City Policy as part of the second phase of the Dubai 2040 Urban Master Plan. 

    In addition to the road projects, the RTA’s Dubai Metro Blue Line extension and Dubai Metro Gold Line form part of Dubai’s plans to improve residents’ quality of life by cutting journey times, as outlined in the policy.

    The policy aims for residents to have 80% of their daily requirements within a 20-minute journey, on foot or by bicycle. This goal will be achieved by developing integrated service centres with all necessary facilities and increasing population density around mass transit stations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20745908/main.jpg
    Yasir Iqbal
  • Bahrain awards Sitra 400kV grid contracts

    19 October 2026

    Bahrain’s Electricity & Water Authority (EWA) has awarded two contracts related to the establishment of new Sitra 400kV grid substations, according to sources.

    The first contract covers transformer and reactor works including the supply and installation of three 400 kV, 500 MVA power transformers along with associated reactors. The package covers design, manufacturing, supply, transportation, erection, testing, and commissioning.

    Switzerland-headquartered Hitachi Energy has been appointed as the main contractor for these works after submitting a bid of BD17.8m ($47.1m) in April, as reported by MEED.

    Germany’s Siemens Energy previously submitted the only other offer of BD23.9m ($63.2m).

    The second contract involves 400kV and 220kV feeder cable works for the same Sitra 400kV grid substations. The package covers the design, manufacture, supply, transportation, installation, testing and commissioning of 400kV and 220kV feeder cables.

    Earlier this year, MEED reported that three South Korean companies had made offers for the feeder cable packages, with Iljin Electric submitting the lowest bid of BD35m ($92.7m).

    It is understood that the contractor has now been appointed to carry out the main works for the project.

    The works are part of the broader “Establishment of New 400 kV Grid Substations & Subsystem” initiative, aiming to bolster the power grid’s capacity and support integration with new power and water infrastructure at Sitra.

    In September 2025, Siemens Energy won a contract worth BD48.1m ($127m) to build a 400kV transmission substation in Sitra to provide the transmission link for the planned Sitra independent water and power plant (IWPP), which is expected to generate at least 1,200MW of electricity.

    Bahrain’s fourth IWPP is being procured by EWA under a public-private partnership framework for 20-25 years.

    The combined-cycle gas turbine plant includes a seawater reverse osmosis desalination facility, which will have a production capacity of 30 million imperial gallons a day of potable water.

    Last month, MEED exclusively reported on proposed first-year tariffs for the project following the opening of financial bids. Saudi Arabia’s Acwa submitted the lowest offer for both the power and water components.

    This includes a first-year power tariff of BD17.1652 ($45.65) a megawatt-hour and a water tariff of BD0.4915 ($1.307) a cubic metre.

    Abu Dhabi National Energy Company (Taqa) submitted a first-year power tariff of BD17.48190 ($46.49) a megawatt-hour and a water tariff of BD0.54285 ($1.444 ) a cubic metre.

    The main contract for the build-own-operate project is expected to be awarded by the end of the year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20673857/main.jpg
    Mark Dowdall
  • Algeria tenders 310km Tamanrasset railway

    16 October 2026

     

    Algeria’s state railway project developer, Agence Nationale d’Etudes et de Suivi de la Realisation des Investissements Ferroviaires (Anesrif), has invited national and international contractors to bid for the construction of a 310-kilometre (km) railway line between Hotel Station and Moulay Lahcen Station. 

    The planned line is a key segment of the proposed railway corridor connecting El-Menea, In-Salah and Tamanrasset across the southern wilayas of In-Salah and Tamanrasset.

    The tender notice was issued on 12 October, with bids due by 10 November.

    The tender is open to single contractors and consortiums. To qualify, single firms must have executed at least 200km of new railway lines or track-doubling works since 2010, with accepted project certificates covering sections of at least 100km, along with a cumulative 800 metres of railway bridges with individual spans exceeding 30 metres.

    Bidders must also provide at least two rail-tamping machines, two ballast regulators, and a project director with an engineering degree and at least five years of railway construction management experience.

    From a commercial and classification perspective, single bidders and consortium leaders must hold a category-nine (IX) professional qualification in public works.

    Bidders must also demonstrate an average annual turnover in construction of at least DZ260bn ($1.96bn) across the 2023-2025 financial period.

    For joint ventures, the cumulative turnover of all members must meet the $1.96bn threshold, with the consortium leader accounting for at least $1.3bn.

    Offers must be accompanied by a bid bond exceeding 1% of the total bid value for submissions exceeding $7.4m, with proposals remaining valid for 90 days beyond the submission date.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20665591/main.jpg
    Yasir Iqbal
  • Joint venture wins $246m RCRC bridges contract

    16 October 2026

     

    A joint venture of local contractor Mofarreh Group and Turkey-based Gulsan Holding has won an estimated SR923m ($246m) contract from the Royal Commission for Riyadh City (RCRC) to construct a series of grade-separated steel flyovers across the capital.

    The contract, known as Package 2 (Groups 2 and 3), is part of RCRC’s urgent bridges programme under the wider project to build steel bridges at 10 junctions across Riyadh.

    The works have a 12-month execution timeline to fast-track traffic decongestion across major arterial corridors.

    The joint venture’s scope covers the engineering and construction of grade-separated steel bridge interchanges across seven key intersections:

    • IC04: Al-Khair Road and King Salman Bin Abdulaziz Road
    • IC05: Prince Turki Road and Imam Saud Road
    • IC06: Al-Takhassosi Road and Saeed Al-Sulami Road
    • IC07: Khurais Road and Al-Hareth Bin Abdullah Road
    • IC08: Khurais Road and Ash-Sharq Road
    • IC09: Khurais Road and Marmar Road
    • IC10: Al-Kharj Road and Al-Hilla Road

    The total length of the flyovers is 8.86 kilometres, excluding Junction IC10.

    In addition to the structural steel superstructures, concrete bridge foundations, decks and approach ramps, the contract includes retaining walls, utility diversions, temporary phased traffic arrangements, associated roadworks, drainage networks, roadway lighting, intelligent transportation systems and landscaping.

    The client received commercial proposals from several local and international contractors. Other bidders included:

    • Masco
    • Nesma & Partners
    • Al-Omaier Trading & Contracting Company 
    • Yuksel Saudia 
    • Batco 
    • Modern Building Leaders
    • Sapac

    The urgent bridges initiative is part of Riyadh’s rapid transport infrastructure programme to improve traffic throughput, enhance safety and ease vehicular congestion across central and ring-road corridors ahead of major events, including Expo 2030 and the 2034 Fifa World Cup.

    In July, Mofarreh Group and Turkiye’s Gulsan Holding formed a joint venture to bid for and deliver transport infrastructure projects in Riyadh for RCRC.

    The joint venture said it will target road, bridge, viaduct and interchange projects.

    Mofarreh will provide local market access and operational capacity, while Gulsan will contribute international experience in large-scale transport projects.

    The companies said the new venture will support knowledge transfer and localisation, and promote the use of international engineering and construction standards aligned with Saudi Arabia’s Vision 2030 infrastructure and sustainability goals.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20663255/main.png
    Yasir Iqbal
  • Humain tenders 100MW Riyadh AI data centre

    16 October 2026

     

    Register for MEED’s 14-day trial access 

    Saudi artificial intelligence infrastructure developer Humain has issued a request for proposals for an engineering, procurement and construction (EPC) contract to deliver a 100MW artificial intelligence (AI) data centre facility in Riyadh’s Al-Saad area.

    The tender was issued on 17 September, with bids due by 8 November.

    The contract includes core-and-shell works; civil works; mechanical, electrical and plumbing installation; testing and commissioning; and site infrastructure across a 350,200-square-metre plot.

    The project also includes an optional expansion phase that could raise total site capacity to 200MW.

    The initial 100MW development is split into two equal 50MW phases, structured across two single-storey IT buildings housing four 25MW data halls.

    Phase one targets a ready-for-service date by October 2028, followed by phase two in January 2029.

    Under the optional phase three, an additional 100MW facility would be brought online by July 2029.

    The data centre will be designed to support high-density graphics processing unit clusters and AI-compute workloads, with rack densities of 240kW to 250kW.

    The facility will be built to Uptime Institute Tier III topology and LEED Silver standards as a baseline, targeting LEED Gold.

    The operational design targets an annualised power usage effectiveness below 1.35.

    Power will be delivered through four 33kV connections supplied by Saudi Electricity Company from two separate high-voltage/medium-voltage primary substations. The scope requires 15 transformers, 15 static 2,250kW IT uninterruptible power supply (UPS) units, and 450kW mechanical UPS systems with lithium-ion battery storage for each 25MW block. 

    Backup emergency diesel generators will be provided on an owner-furnished, contractor-installed basis, with the EPC contractor handling their installation, connection and testing. Fuel storage will provide 24 hours of autonomous run-time, split between on-site underground bulk tanks and generator belly tanks.

    Thermal management combines air and liquid cooling. High-density server racks will be equipped with direct-to-chip liquid cooling loops using coolant distribution units and technical water distribution, paired with air-cooled chillers operating in dual high- and low-temperature loops, alongside fan-wall units.

    The total construction timeline is capped at 25 months from site handover or contract signing, with pre-execution early mobilisation scheduled to start in January 2027.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20661045/main.jpg
    Yasir Iqbal