The Middle East is the world's least expensive region for data center construction, creating an advantage as demand for artificial intelligence infrastructure grows. Construction costs average USD 9.93 per watt, below Europe at USD 12.76, Asia at USD 12.10 and North America at USD 12.06, according to Turner & Townsend's latest Data center Construction Index (DCCI).
The report draws on more than 500 ongoing or recently completed projects across 62 markets. It also includes responses from over 400 professionals working in the global data center industry. The UAE ranks among the lowest-cost locations at USD 9.20 per watt, followed by Qatar at USD 9.80 and Saudi Arabia at USD 10.80. These figures place all three markets within the index's 62 locations.
Alan Coary, Turner & Townsend's Middle East data center lead, said: “The Middle East stands to benefit from its relatively low cost of construction and energy, as well as strong government backing for AI infrastructure. Saudi Arabia’s HUMAIN initiative and the UAE’s continued investment in AI and hyperscale data center development through G42 and Khazna are transforming the region’s computing capacity and positioning it as a globally competitive AI hub. This reflects a wider trend towards sovereign AI and government-backed digital infrastructure programmes.”
Global construction costs continued to climb in 2026 as demand for computing capacity outpaced the availability of powered land and skilled workers. More than half of survey respondents reported cost increases exceeding 6%, while around 20% experienced inflation above 15%. Power supply also presents a major challenge. Some 56% of respondents identified electricity access as an obstacle to project delivery. More than half said utility connections typically take one to two years.
Meanwhile, 52% expect most of their 2027 projects to support AI workloads. PwC estimates annual data center capital expenditure at USD 800 billion, with spending projected to reach USD 1.8 trillion by 2050. The findings highlight the Middle East's cost advantage as AI investment expands, although access to power, equipment and specialist skills will continue to shape project delivery.
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