Data centers now serve as the brains that manage smart cities, processing vast volumes of data instantaneously
The UAE continues to strengthen its advanced approach to smart city development, supported by broad strategic investments, particularly in data centers, which form the operational backbone of smart urban systems and the knowledge- and innovation-based digital economy.
As artificial intelligence, the Internet of Things and digital government services continue to scale rapidly, data has become central to modern urban life, with data centers emerging as the real-time infrastructure through which smart cities are operated and managed.
Building an urban model based on data-driven decision-making
Data centers now serve as the brains that manage smart cities, processing vast volumes of data instantaneously, often reaching several terabytes in advanced environments, Amel Chadli, President of the Gulf Cluster at Schneider Electric, told WAM. She noted that this capability has become essential for the UAE, as modern urban systems, from transport and government services to energy and safety, rely on interconnected digital infrastructure powered by AI and the Internet of Things.
Projects such as Masdar City, the Dubai Urban Plan 2040 and the Digital Government Strategy 2025 demonstrate that the UAE is building an urban model based on data-driven decision-making to improve quality of life. Turning this vision into reality, she added, requires secure, flexible local digital infrastructure capable of keeping pace with new applications.
Chadli stressed that the expansion of AI applications will drive higher power requirements for data centers, which may exceed 20 to 50 kilowatts per server rack. She added that the UAE’s investments in sustainable, high-efficiency data centers therefore represent a fundamental step in building the cities of the future.
Enabling seamless connectivity and integrated digital ecosystems
For his part, Kamel Al-Tawil, Managing Director for Middle East and North Africa at Equinix, said that data centers represent the digital brain of smart cities, enabling real-time data processing, analysis and intelligent decision-making. He explained that rapid response, high capacity and ultra-connectivity are essential elements for modern technologies such as AI, the Internet of Things and smart services.
Enabling seamless connectivity and integrated digital ecosystems, he added, directly supports the UAE’s vision of building connected, sustainable cities ready for future requirements.
Al-Tawil also noted the importance of localizing data traffic to reduce latency, enhance performance and meet growing demand for digital services such as video, cloud computing, online gaming and e-sports, particularly as 83 percent of internet traffic in the Middle East continues to pass through Europe.
Data represents the core foundation of any smart city, as the efficiency of urban services depends on the ability to collect data from millions of sensors and Internet of Things devices and analyze it in real time within data centers. Without this capability, smart cities cannot operate as a single integrated system, and digital solutions remain fragmented with limited impact.
UAE data center market to surpass $3.3 billion by 2030
Economic indicators reflect the scale of this trend. Reports by global research institutions, including Research and Markets, indicate that the UAE data center market is expected to exceed $3.3 billion by 2030. The UAE already has the largest data center infrastructure in the region, with plans to double the number of centers in the coming years, reinforcing its position as a regional and global hub for data storage and processing, in line with the rapid expansion of smart city projects nationwide.
The UAE is also among the world’s leading investors in smart cities, particularly in AI, the Internet of Things, data centers and advanced telecommunications networks.
According to the IMD Smart City Index, issued by the World Competitiveness Center of the International Institute for Management Development, Dubai rose to fourth place globally in the 2025 smart cities ranking, while Abu Dhabi ranked fifth.
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Autor(en)/Author(s): Yara Abi Farraj
Dieser Artikel ist neu veröffentlicht von / This article is republished from: Economy Middle East, 26.01.2026
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