Private Equity Firms Show Interest in Gulf Data Hub’s Minority Stake

Gulf Data Hub Considering Sale of Minority Stake to Meet Digital Infrastructure Demand

The United Arab Emirates-based Gulf Data Hub is contemplating the sale of a minority stake in response to the rising global demand for digital infrastructure. According to sources, the closely-held company has garnered interest from international private equity firms. Working alongside JPMorgan Chase & Co., Gulf Data Hub aims to finalize the sale by the third quarter of this year, potentially raising up to $1 billion. Despite no definitive decisions on timing and valuation, representatives from both Gulf Data Hub and JPMorgan have chosen not to comment.

Increased Interest in Data Centers

This potential sale occurs amidst a surge in deals within the data-center sector, fueled by the booming demand for cloud services. Recent key deals include Nokia Oyj’s $2.3 billion bid for Infinera Corp., and GDS Holdings Ltd.'s sale of a stake in its data-center business outside China to a group of alternative asset managers. According to a Linklaters report, nearly $22 billion has been invested globally in the data-center sector in the first five months of this year, emphasizing the critical role data centers play in the expanding digital economy.

Regional Developments in AI and Data Centers

Regionally, the UAE and Saudi Arabia are vying to become the central hubs for artificial intelligence, prompting the construction of several expensive data centers. Gulf Data Hub, established in 2012 and owned by founder Tarek Al Ashram, operates five data centers with an additional 15 under construction across the Middle East. The company collaborates with firms such as Microsoft Corp. and Oracle Corp., competing against Khazna, which is owned by Abu Dhabi's technology group G42 and chaired by UAE National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan.