du and Microsoft Expand UAE Tech With Hyperscale Data Centre
In a move that cements the UAE's growing position in global digital infrastructure, Emirates Integrated Telecommunications Company (du) has announced it has reached a US$544.5m deal with Microsoft to develop a new hyperscale data centre.
The agreement, unveiled during Dubai AI Week, sees du take the lead on construction and operations, with Microsoft confirmed as the facility's primary tenant.
This partnership aims to boost data centre capabilities and expand hyperscale cloud infrastructure, underscoring the increasing importance of AI services and connectivity in the region.
Fahad Al Hassawi, Chief Executive Officer at du, says: "This deal represents a pivotal leap in our strategic goal to revolutionise the digital ecosystem of the UAE."
Strengthening AI infrastructure through telco and tech collaboration
The hyperscale data centre will add considerable depth to du’s existing infrastructure.
The telecommunications company currently operates five data centres across the United Arab Emirates and has been investing steadily in AI capability.
As demand for AI tools and cloud services grows, this new facility offers the capacity and scale to support both public and private sector digital services.
Founded in 2006, du has built a strong position in the UAE telecommunications sector, offering mobile and fixed-line services, broadband connectivity and IPTV solutions.
In more recent years, it has pivoted towards digital transformation, supporting enterprises with cloud connectivity powered by fibre and 5G technology.
Alongside these developments, du signed a deal earlier in 2025 to connect the UAE to the Peace subsea cable.
The extension of this international cable system is expected to strengthen regional and global network infrastructure, further supporting the telco’s digital ambitions.
This latest venture with Microsoft is part of a broader strategic effort to establish the UAE as a key player in AI and cloud technology.
With Microsoft already expanding its footprint in the region, the new data centre complements its investments in both the UAE and Saudi Arabia.
Microsoft's regional and global hyperscale growth
Microsoft’s role as a tenant in du’s data centre reflects its wider approach to hyperscale development.
The company continues to scale its cloud operations globally, adding more data centre capacity in 2024 than in any previous year. It now operates across 60+ regions and more than 350 data centres worldwide.
Despite temporarily slowing down early-stage builds in early 2025, Microsoft is not stepping away from growth.
It plans to invest more than US$80bn to expand its data centre infrastructure, driven by high customer demand for its cloud and AI services.
In a LinkedIn post, Noelle Walsh, President of Microsoft Cloud Operations & Innovation, says: "I am extremely proud of the work we are doing in Cloud Operations + Innovation and beyond to enable our customers with our data centre infrastructure – the infrastructure that is the backbone of the Microsoft Cloud and AI."
“We expect to have another record year in 2025, and our global footprint continues to expand, across 60+ regions and 350+ data centres worldwide. Customer demand for our cloud and AI services continues to increase as reflected by strong growth in revenue and customer commitments in Microsoft Cloud and AI.”
The company’s strategy also includes strengthening AI and cloud capabilities in the Middle East.
Earlier in the year, Microsoft entered into a partnership with the Abu Dhabi government and Core42 to offer sovereign cloud and AI infrastructure.
It also launched a new data centre region in Saudi Arabia’s Eastern Province, with each of the three Azure availability zones equipped with independent power, cooling and networking systems.
These facilities support local organisations by offering low-latency and highly available cloud solutions.
Building a hyperscale future in the UAE
The development of this hyperscale data centre in partnership with Microsoft supports du’s vision of turning the UAE into a regional AI hub.
The facility is expected to roll out in phases, allowing gradual expansion in line with enterprise and governmental needs.
Hyperscale data centres – large-scale facilities designed to support robust cloud computing and storage systems – are vital for enabling AI development and processing large volumes of data.
By aligning with Microsoft, du secures not only a global technology partner but also reinforces its infrastructure with the backing of one of the world's largest cloud providers.
As hyperscale builds become a standard part of digital transformation across the world, this deal brings the UAE into sharper focus for global technology leaders. It signals a continued commitment from both telcos and tech companies to invest in resilient, scalable and AI-ready infrastructure.
With AI, cloud and connectivity at the centre of regional transformation, the du-Microsoft data centre sets the tone for future collaboration across the technology and telecommunications industries.
Explore the latest edition of Technology Magazine and be part of the conversation at our global conference series, Tech & AI LIVE.
Discover all our upcoming events and secure your tickets today.
Technology Magazine is a BizClik brand
