Microsoft and G42 have confirmed a 200-megawatt (MW) United Arab Emirates (UAE) datacentre expansion, to be executed by Khazna Data Centers, a subsidiary of the latter.

The new cloud infrastructure is scheduled to begin coming online by the end of 2026. It forms part of Microsoft’s previously announced $15.2bn investment in the UAE.

This announcement extends the Microsoft-G42 partnership, scaling local digital infrastructure and increasing access to cloud and AI resources.

According to Microsoft, the additional datacentre capacity is designed to support the provision of Microsoft Azure services, thereby expanding scalable cloud and AI workloads for both public and private sector organisations.

This UAE datacentre expansion aligns with the country’s national digital economy strategy, which aims to double the digital sector’s GDP contribution over the next decade.

G42 Group CEO Peng Xiao said: “Our partnership with Microsoft advances our mission to build the Intelligence Grid, the interconnected infrastructure for intelligence designed to empower people, industries, and nations in the AI era.”

The infrastructure will feature advanced graphics processing unit (GPU) technology and AI capabilities, enabling government agencies, regulated industries, and enterprises to deploy and grow cloud-based applications.

Data protection, cybersecurity, and responsible AI development are said to be central to the Microsoft-G42 partnership.

The Responsible AI Future Foundation, which is a collaboration involving Microsoft, G42, and MBZUAI, operates as a governance structure for AI deployment and oversight in the region.

Microsoft has committed “to skill one million people in the UAE by 2027,” linking this datacentre expansion with broader plans for local workforce development in digital and cloud computing skills.

The Microsoft-G42 partnership has previously established the Global Engineering Development Center and the AI for Good Lab in Abu Dhabi.

Ongoing efforts include working with government entities and academic institutions on advanced training programmes focused on AI and cloud technologies.

This latest increase in datacentre infrastructure builds on earlier joint projects between Microsoft and G42, such as Abu Dhabi-based research centres specialising in AI and initiatives supporting responsible technology adoption.

Microsoft president and vice chair Brad Smith said: “This expansion is more than datacentres. It’s about powering the UAE’s future.

“By combining Microsoft global expertise with G42’s local leadership and broadening role as an international neocloud enterprise, we’re building the foundation for innovation that will bring new opportunities to people across the country.”

Separately, Microsoft has introduced new data sovereignty features for clients in Europe and Switzerland, including enhanced options for private cloud deployments and expanded AI services within the EU Data Boundary.

Microsoft said that these new features respond to growing demand from governments, healthcare providers, financial institutions, and enterprises seeking secure cloud solutions that offer tighter control over data operations.

Microsoft Switzerland national technology officer Marc Holitscher said: “With our Swiss datacentres and comprehensive sovereignty capabilities, we empower organisations to process sensitive data securely in the cloud—right here in Switzerland.”