Dubai Holding weighs investment in Bain-backed data centre builder

• Move aligns with Gulf sovereigns’ long-duration capital push into hyperscale, fiber, and subsea connectivity across EMEA.
• As Bain Capital seeks funding for Hscale, Dubai Holding considers a stake to accelerate European expansion.
• GCC state-backed investors intensify data centre buildout; Dubai Holding’s prospective Hscale deal underscores the trend.

Dubai Holding is considering an investment in Hscale as it looks to expand its European portfolio, according to a media report.

The conglomerate is working with a financial adviser to advance a potential deal in the Bain Capital-backed company, which is seeking additional funding to scale its data centre platform, the report said.

Hscale was launched in 2024 after Bain Capital acquired 80 per cent of Aquila Group’s data centre unit, AQ Compute, with a mandate to grow the business across EMEA.

The London-based hyperscale provider has announced two campuses in Milan, committing 250MW of power capacity and €2 billion of investment, and is pursuing a broader pipeline across Spain, Germany, and Switzerland.

Dubai Holding, which manages over AED500 billion (about $136 billion) in assets, is among several state-backed Gulf investors stepping up data centre commitments. In 2023, Saudi Arabia’s Public Investment Fund formed a venture with DigitalBridge Group to develop data centres in the kingdom and other GCC markets.

GCC’s digital infrastructure push

GCC sovereign investors are accelerating bets on digital infrastructure as part of diversification and digital-sovereignty agendas, channeling long-duration capital into hyperscale campuses, fiber, and subsea connectivity.

Saudi Arabia’s PIF has a JV with DigitalBridge to build data centers in the kingdom and across the Gulf, while UAE vehicles—including Mubadala, ADIA, ADQ and Dubai Holding—are backing platforms and joint ventures with global operators and courting hyperscalers.

Qatar’s QIA and Oman’s OIA are adding selective capacity and leveraging subsea landings, with Bahrain and Kuwait pursuing targeted, telecom-linked expansions.

The model favours platform joint ventures, build-to-suit projects, and long-term power arrangements to secure 50–200MW-plus sites near cable nodes, under policies that fast-track permits and incentivize renewables.

Key sensitivities include power and water intensity, grid upgrades, specialized talent, and supply-chain lead times. For Hscale and Dubai Holding, sovereign co-control capital can underwrite multi-year build ramps in Europe while enabling reciprocal capacity and landing-rights options in MENA, with strong sustainability credentials emerging as a competitive edge.

Key actors and moves:

• Saudi Arabia (PIF): Multi‑billion-dollar DC program; JV with DigitalBridge to build in KSA and wider GCC; stakes across telecom towers, fiber, and cloud adjacency.
• UAE (Mubadala, ADIA, ADQ, Dubai Holding): Direct DC platform investments, JV structures with global operators, and backing of submarine cables and terrestrial fiber; incentives for hyperscalers (Microsoft, AWS, Google Cloud).Qatar (QIA): Capital into global digital infra managers and selective regional DC capacity; support for subsea cable diversity into Doha.
• Oman (OIA): Hosting major subsea landings (e.g., Barka/Salalah) and promoting AI-ready campuses leveraging cooler coastal climates.
• Bahrain/Kuwait: Smaller but targeted plays via pension/sovereign arms and telecom-affiliated DC expansions.