MENA region strives for AI hub status while tackling energy sustainability challenges

The MENA region is embarking on an ambitious journey aimed at establishing itself as a global digital and artificial intelligence (AI) hub, yet this transformation is accompanied by a pressing challenge: balancing AI-driven economic growth with sustainability goals. A critical consideration is ensuring adequate power supply that does not exacerbate reliance on fossil fuels or strain national electricity grids.

Forecasts indicate that AI could contribute a staggering $320 billion to the MENA economy by the year 2030. However, tapping into this potential hinges on a foundational element—reliable power. The region’s datacentres, a cornerstone of AI infrastructure, consume approximately 3% of global electricity, and this figure could escalate to 4% by 2030. The advanced facilities that train sophisticated AI models, such as OpenAI’s ChatGPT and Google’s DeepMind, demand immense electricity, requiring megawatt-scale supplies and extensive cooling systems, particularly given the warm climate typical of the Middle East Gulf.

Saudi Arabia exemplifies the pressing nature of this challenge; the nation’s electricity consumption is anticipated to nearly double, reaching 120 gigawatts (GW) by 2030, largely driven by AI applications. Countries like Saudi Arabia and the UAE, which are on the forefront of ambitious AI initiatives, face a pivotal opportunity to lead in energy innovation, notably through the exploration of small modular nuclear reactors (SMRs). These compact reactors could provide a scalable, reliable, and low-carbon energy source suitable for powering the burgeoning AI sector without undermining regional climate targets.

Investment in digital infrastructure is rapidly increasing throughout the MENA region, driven by cost-competitive energy, high-performance infrastructure, and strategic public-private partnerships. While the UAE and Saudi Arabia are currently leading this technological charge, Qatar, Bahrain, and Egypt are also positioning themselves as key players in the AI domain. Notable ventures include a partnership between Google and Saudi Arabia’s Public Investment Fund to establish a $100 billion AI hub, Amazon Web Services’ $5.3 billion investment in developing datacentres in Saudi Arabia, and Microsoft’s $1.5 billion commitment to collaborate with Abu Dhabi’s G42, an AI holding company. Additionally, Qatar is advancing its National AI Strategy, and Egypt is constructing its first hyperscale datacentre in collaboration with Emirati firm Khazna.

A crucial component of this digital transformation is a steady and cost-competitive power supply, which has become essential in attracting investments for datacentres, particularly in nations rich in oil and gas resources. However, as infrastructure expands, the need for sustainable electricity solutions becomes paramount. Efforts to reduce dependency on fossil fuels and meet net-zero commitments require low-carbon energy sources; yet, renewable options like wind and solar, while valuable, do not provide the constant power necessary for datacentres. Although energy storage systems could mitigate issues related to intermittency, their scalability for datacentre demands poses substantial logistical challenges.

Within this framework, SMRs offer a viable path as the region contemplates diverse low-carbon energy solutions. These advanced nuclear technologies promise reliable and high-density electricity, presenting a feasible option for energy-intensive digital infrastructures. The ability to site SMRs adjacent to datacentres could yield considerable cost savings by minimising transmission needs. A growing interest in SMRs as a clean energy source has emerged globally, with major tech firms such as Google and Microsoft investigating their potential to fulfil sustainability targets. This trend favours MENA countries, especially Saudi Arabia and the UAE, which benefit from stable regulatory environments and existing government support.

Countries like Morocco and Bahrain are also considering the deployment of SMRs, recognising the need for compact, reliable energy solutions amid geographical limitations for large-scale projects. While the adoption of SMRs is not without challenges—such as security risks, regulatory oversight, and safety protocols—these complexities present an opportunity for MENA governments to take a lead role in developing global standards for this emerging technology.

Furthermore, there are prospects for datacentres to serve as experimental sites for clean energy strategies. Achieving this requires proactive policymaking to streamline regulatory frameworks and encourage international collaboration, particularly with technology companies and nuclear organisations.

As the MENA region strives to become a leader in global AI innovation, it faces the essential task of ensuring that this growth does not compromise energy resilience or climate objectives. Achieving a sustainable equilibrium involves investing in innovative clean-energy systems. In this context, SMRs represent a formidable innovation, providing stable, low-carbon energy crucial for AI operations. Through strategic investments in both AI and sustainable energy solutions, the MENA region stands poised to not only carve out a niche as a leader in AI development but also to pioneer a model for sustainable, technology-driven economic growth.

Source: Noah Wire Services