Microsoft and Core42 to build sovereign cloud and AI infrastructure for Abu Dhabi

Microsoft and Core42 to build sovereign cloud and AI infrastructure for Abu Dhabi

  • 20.03.2025 11:08
  • datacenterdynamics.com
  • Keywords: AI, Cloud Computing

Microsoft and Core42 are collaborating with Abu Dhabi to develop a sovereign cloud and AI infrastructure, aiming to enhance government efficiency and set a global benchmark for innovation. The partnership leverages Microsoft's cloud technologies and G42's AI expertise, supported by significant investments in digital transformation.

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Estimated market influence

Microsoft

Microsoft

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Analyst rating: Strong buy

Leading the cloud and AI initiatives in Abu Dhabi's digital transformation.

Core42

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Analyst rating: N/A

Developing sovereign cloud infrastructure with Microsoft for Abu Dhabi.

Context

Analysis and Summary: Microsoft and Core42 Partnership for Abu Dhabi's Sovereign Cloud and AI Infrastructure

Key Facts and Data Points

  • Partnership Announcement: Abu Dhabi government signed a multi-year agreement with Microsoft and Core42 (owned by G42) to build sovereign cloud and AI infrastructure.
  • Signatories: Ahmed Tamim Hisham Al Kuttab (Abu Dhabi's Department of Government Enablement), Satya Nadella (Microsoft CEO), and Peng Xiao (G42 group CEO).
  • Sovereign Cloud Capacity: Designed to process over 11 million daily digital interactions between Abu Dhabi’s government, citizens, and businesses.
  • Investment: Abu Dhabi committed $3.54 billion under its Abu Dhabi Government Digital Strategy 2025-2027, aiming for 100% automation of government processes.
  • AI Solutions: Over 200 AI-driven solutions to be deployed for public service efficiency.
  • Technology Framework: Core42’s Sovereign Public Cloud powered by Azure, enhanced with G42’s Insight platform for data sovereignty and hyperscale innovation.
  • Historical Context: Microsoft invested in G42 in 2023, taking a minority stake.
  • Cloud Infrastructure: Microsoft operates one cloud region in UAE (launched 2019) with three availability zones in Dubai. A second cloud region is under construction, set to go live in 2026, with plans for a Saudi Arabia cloud region announced earlier this year.

Market Insights and Business Impact

  • Sovereign Cloud Growth: Abu Dhabi’s initiative underscores the growing demand for sovereign cloud solutions globally, driven by data sovereignty concerns and regulatory requirements.
  • AI Adoption in Government: Microsoft and G42 are positioning Abu Dhabi as a global benchmark for AI-native government services, setting a standard for public sector AI adoption.
  • Strategic Investments: Microsoft’s five-fold increase in investment in Abu Dhabi highlights its commitment to expanding cloud and AI capabilities in the Middle East.
  • Competitive Dynamics: This partnership strengthens Microsoft’s position in the UAE market while solidifying G42’s expertise in AI and cloud infrastructure.

Industry Implications

  • Global Benchmark: The initiative sets a precedent for other governments to adopt sovereign cloud and AI-driven public services.
  • Regulatory Impact: Emphasis on data sovereignty aligns with evolving global regulations around data control and privacy.
  • Long-Term Effects: Abu Dhabi’s digital transformation will drive efficiency, innovation, and resilience in government operations, potentially attracting foreign investment and talent.

Strategic Considerations

  • Partnership Synergy: Combines Microsoft’s cloud expertise with G42’s AI capabilities to create a robust, future-ready infrastructure.
  • Market Expansion: Positions Abu Dhabi as a leader in digital transformation, enhancing its reputation as a global hub for technology innovation.
  • Investment Attraction: The initiative may attract tech companies and investors looking to leverage Abu Dhabi’s advanced digital infrastructure.

Conclusion

The partnership between Microsoft, Core42, and Abu Dhabi represents a significant step in the global shift toward sovereign cloud computing and AI-driven governance. It not only enhances Abu Dhabi’s technological capabilities but also establishes it as a leader in public sector innovation, with broader implications for the Middle East and beyond.