KKR & Gulf Data Hub to invest $5 billion to meet demand for AI infrastructure
Global private equity firm KKR acquires stake in Gulf Data Hub
#UAE #infrastructure – New York-headquartered global investment firm KKR is acquiring a stake in Gulf Data Hub (GDH), one of the largest independent data centre platforms in the Middle East. This partnership will support over $5 billion in investments to expand GDH’s operations, aligning with rising hyperscale, AI, and cloud demands across the GCC (Gulf Cooperation Council).
SO WHAT? –Although the investment in GDH marks KKR’s first data centre investment in the Middle East, it has a big data center footprint globally, with investments in more than 100 facilities. In October, KKR signed a $50 billion strategic partnership with American investment firm Energy Capital Partners (ECP) to fund AI and data infrastructure. The investment firm expects global data center spending to hit $250 billion a year. The GDH deal could pave the way for more global investment to enter the Middle East's fast growing data centre sector.
Here are some key points about this investment deal:
Leading global investment firm KKR is acquiring an equity stake in Gulf Data Hub (GDH), one of the largest independent data centre platforms in the Middle East focused on serving hyperscale demand across the GCC. The stake will be acquired on behalf of KKR funds under management.
The investment, which is subject to customary regulatory approvals, is being made through KKR’s Global Infrastructure strategy. The transaction is one of the largest international investments into a UAE-founded business.
The KKR and GDH deal will fund over $5 billion of total investment in the GCC’s data centre sector, growing GDHs’ market position and underpinning its organic and inorganic growth plans.
Founded in 2012, GDH operates seven state-of-the-art data centres in the UAE and Saudi Arabia, with plans to expand into Kuwait, Qatar, Bahrain, and Oman.
To date, KKR has invested more than $29 billion across 22 investments in relevant digital infrastructure companies across data centers and fiber, as well as $15 billion in power, utilities, and energy.
With offices in Dubai and Riyadh, KKR has invested significantly in other types of infrastructure across the region, including ADNOC pipelines and Etihad’s aircraft portfolio.
The deal reflects the unprecedented demand for data centres driven by the fast-growing demand for AI solutions, government-led digital transformation and increasing digital connectivity across the GCC.
ZOOM OUT – Middle East demand for AI and data infrastructure and cloud services is growing fast as large companies and government departments invest heavily in data transformation, digitisation and artificial intelligence. According to Turner & Townsend, the Middle East market was valued at $5.57 billion in 2023, with projections indicating that it will reach $9.61 billion by 2029 – reflecting a compound annual growth rate of 9.52 percent.
Read more about the Middle East data centre market
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Microsoft completes build for new Saudi data centre (Middle East AI News)
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Groq to offer on-demand services from KSA (Middle East AI News)