Global engineering company ABB expects strong growth in data centre construction across the UAE and Saudi Arabia as it develops next-generation infrastructure through a partnership with US chipmaker Nvidia.
“We’re partnering a lot on the data centre build-out, with some of the large announced projects as well as with key players,” ABB president and group chief executive Morten Wierod told The National in an interview in Dubai.
He declined to mention specifics of its work on these projects.
The Zurich-based company said in October that it would be advancing development of gigawatt-scale data centres that use 800-volt direct current architecture to power 1 megawatt server racks.
This means ABB-Nvidia data centres will use direct current rather than alternating current to power individual server racks, which supports artificial intelligence processing.
The new generation rack will draw up to 1MW power each, which is 10 times more than current capacity, making them more energy efficient. ABB and Nvidia plan to deploy this technology worldwide by 2028 as the chips are currently under development, Mr Wierod said.
“This is not just about chips,” he said. “When the architecture of the chip changes, everything before it has to change − the racks, power distribution units, incoming power to the data centre."
Data centres account for around 7 per cent of ABB’s global revenue. It is the company’s fastest-growing segment, expanding at a compound annual growth rate of more than 25 per cent between 2020 and 2024, Mr Wierod said.
Growth is expected to remain in double digits for years, driven by AI workloads that require high computing power, he added.
Last month, the US approved the sale of Nvidia chips to the UAE’s G42 and Saudi Arabia’s Humain. This followed a state visit by Saudi Crown Prince Mohammed bin Salman to the White House.
Gulf states have steadily increased spend on data centres, which are seen as an anchor for non-oil focused economic growth. The UAE and Saudi Arabia, both key oil exporters, also draw baseload for the energy-intensive data centres from cheap gas and in the case of Abu Dhabi, nuclear energy.
“The Gulf is one of the highest-growth regions for us,” Mr Wierod said. “Capital allocation follows demand. Where we see future demand, that’s where we invest,” he added.
Since 2019, ABB has invested about $30 million across the UAE and Saudi Arabia, mostly into service centres rather than manufacturing, supported by a regional workforce of about 1,200 people − nearly half of them based in the UAE.
Electricity demand in the region and worldwide is rising sharply as governments continue to add more capacity in renewables and conventional power to support the growth of hyper-scale data centres.
The International Energy Agency noted in April that electricity demand from data centres worldwide is expected to more than double by 2030 to around 945 terawatt-hours. This would account for slightly more than the entire electricity consumption of Japan today, the agency said.
Mr Wierod noted that the region and the world are experiencing an era of “energy expansion” rather than energy transition as every unit of renewable power being added to the grid supports more consumption.
“We have never installed as much renewable capacity as we did last year. And 2025 will be another record year. But from 2019 till today, all the renewable energy that has been entered into the grid has been taken as energy expansion,” he said.
“It has been absorbed by new demand. It’s not displacing fossil fuels, it’s adding to consumption.”
Energy transition needs to account for rising demand, he said. “You cannot remove the base load before you have an alternative. If you did, society would stop.”
