Artificial Intelligence

Dubai’s Hodler in global AI data centre partnership

December 24, 2024, 11:17 AM

Growing interest in AI applications has strained existing data centre capacity and fuelled demand for energy

Computing power for rent
Renewable or hybrid sources
Intense demand in UAE

Dubai’s Hodler Investments has partnered with US technology company Vertical Data to launch “sustainable” artificial intelligence data centres in the UAE, the Gulf, Africa and Canada.

The companies said they are targeting rising demand for high-performance computing.

Growing interest in AI applications has strained existing data centre capacity and fuelled intense demand for energy to power these facilities.

In the UAE, which hosts the highest concentration of data centres in the Middle East and North Africa, vacancy rates dropped to 9 percent in the third quarter of 2023, down from significantly higher availability in previous years, according to a report by real estate consultancy company Knight Frank.

Under the partnership Hodler will supply renewable or hybrid energy to power the data centres, while Vertical Data will oversee operations and provide its GPU-as-a-Service (GPUaaS) “solution in a box” – a cloud-based offering designed for on-demand, high-performance computing.

This means companies can rent computing power via the internet to handle complex data processing, AI tasks or other resource-intensive applications, without needing to build their own infrastructure.

Businesses can scale computing capacity up or down as needed, avoiding the higher costs, setup delays and long-term commitments often associated with traditional data centre contracts.

“Deployment schedules are yet to be determined, but we expect in Q1 2025 to deploy at least the first 20 megawatts (MW) [of data centre capacity] in two of the GCC countries,” Hodler managing director Mohamed El Masri told AGBI.

The company anticipates deploying a total of 200MW of projects across the GCC region next year, supported by commitments from customers in blockchain and AI services, he said.

El Masri added that the collaboration would help accelerate distributed energy infrastructure to power compute clusters in the UAE and the wider Gulf.

Hamid Djam, head of technology at Vertical Data, added: “Our solutions will ensure faster processing and improved efficiencies, while Hodler will ensure powering these hosting and data centres with sustainable mobile power.”

Hodler is funding its expansion through its $500 million Digital Energy Infrastructure Fund, launched in August.

The company said it has sourced close to one gigawatt (GW) of hybrid power projects in its pipeline through subsidiaries NexGen, Brox and PermianChain.

Hybrid projects combine renewable sources such as solar and wind with traditional power sources like natural gas or diesel to ensure reliability and scalability for energy-intensive AI and blockchain computing tasks.

Hodler’s emphasis on sustainable energy solutions seeks to address both scalability challenges and environmental concerns tied to energy-intensive AI computing.

The Middle East data centre market is forecast to grow from $5.6 billion in 2023 to $9.6 billion by 2029, driven by AI and cloud services, according to consultancy Turner & Townsend.

Hodler and PermianChain are also working with AI infrastructure providers in the US to bring advanced technology and know-how to the region.

Industry experts have warned that existing infrastructure is struggling to keep pace with demand.

Quentin Reyes, CEO of IT system data services company Hyperfusion in Dubai, told AGBI in October that infrastructure was one of the “biggest bottlenecks” for AI in the region.