The rapid shift toward artificial intelligence (AI) is triggering a global rush to build data centres capable of supporting high-performance computing, but industry experts are warning that supply chains may not be ready to meet the technical demands.
According to the 2025–2026 Data Centre Construction Cost Index by professional services firm Turner & Townsend, 83 per cent of data centre specialists believe current supply chains are ill-equipped to deliver the advanced cooling technology required for AI facilities.
The study, based on insights from 280 data centre professionals across 52 markets, identifies 2025 as a key turning point as developers move from traditional air-cooled cloud data centres to liquid-cooled, high-density facilities designed to handle AI workloads.
Nearly half of respondents (48 per cent) cited power availability as the most significant challenge to keeping projects on schedule, reflecting the growing energy intensity of AI-driven infrastructure. In hot climates such as Saudi Arabia, liquid cooling and direct-to-chip systems are becoming critical to ensure both performance and sustainability.
Data centre costs climb amid AI rush
Turner & Townsend’s cost index also shows how construction costs vary globally. The Middle East remains relatively cost-competitive, with Saudi Arabia averaging US$11.3 per watt (18th worldwide) and the UAE at US$9.2 per watt (46th).
By contrast, Tokyo and Singapore remain the most expensive markets at US$15.2 and US$14.5 per watt respectively.
Data centre capacity across the Middle East is expected to surge from 1.2 gigawatts this year to 3.3 gigawatts by 2030, driven by hyperscale expansion, stronger regulation, rising investment, and accelerating AI adoption.
Major projects include Khazna’s rollout of AI-ready facilities, du’s hyperscale data centre in the UAE, and HUMAIN’s Saudi-backed plan to add 1.9 gigawatts of capacity by 2030.
Inflation of around 5 per cent in Riyadh, Dubai, and Abu Dhabi during 2025 is adding pressure on budgets, with labour shortages and supply constraints pushing up costs. Turner & Townsend recommends modular construction, local sourcing, and renewable integration to manage risks and improve efficiency.
“The Middle East is emerging as a global digital infrastructure powerhouse,” said Alan Coary, Data Centre Lead for the region at Turner & Townsend. “Saudi Arabia and the UAE are driving this transformation through government initiatives and robust regulatory frameworks… positioning the region as a leader in digital infrastructure and innovation.”
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