AI and data centre investments to drive IT spending in MENA in 2026

• Spending on data centres is set to leap 37.3% in 2026, far outpacing every other category.
• Demand for next-gen data centres is surging as organisations rush to adopt generative AI and machine learning, both of which require massive processing capability.

IT spending across the Middle East and North Africa is on track for remarkable growth, with forecasts suggesting the region will reach $169 billion in total spending in 2026—an 8.9 per cent jump from $155 billion a year earlier, according to figures from Gartner.

What’s fueling this surge?

The transition is being orchestrated by the dynamic efforts of Gulf Cooperation Council (GCC) countries, who are harnessing their economic stability and robust digital strategies to attract international partnerships, roll out extensive digital education, and power innovation at scale.

“Even with headwinds in the global economy, CIOs in the region aren’t pulling back—they’re actively investing in AI, intelligent automation, and flexible cloud technology, while reinforcing cybersecurity and upskilling their workforce,” Mim Burt, Practice VP at Gartner, said.

These investments aren’t just keeping the lights on—they’re transforming local economies to thrive in an increasingly AI-driven world.

While all core IT segments are seeing a boost, data centre systems are the clear frontrunner. Spending here is set to leap 37.3 per cent in 2026, far outpacing every other category. The caveat? The pace of expansion will slow slightly compared to this year as the breakneck rollout phase gives way to more measured, sustained investment.

“Demand for next-gen data centres is surging as organisations rush to adopt generative AI and machine learning, both of which require massive processing capability,” notes Eyad Tachwali, VP of Advisory at Gartner.

It’s primarily governments, hyperscale cloud players, and cutting-edge tech firms leading this charge, rather than legacy enterprises or consumers.

GenAI to steal the show

Software spending is another bright spot, predicted to rise 13.9 per cent to $20.4 billion in 2026. The momentum here is all about generative AI (GenAI), as the region’s businesses embrace modern tools fueled by advanced language models and AI-driven application functionality.

Gartner even forecasts that by 2028, three-quarters of global software spending will go into solutions powered by GenAI.

Mim Burt underscores this shift: “We’ll see more embedded GenAI in business apps, productivity tools, developer environments, and on servers optimised for AI services, making AI an everyday feature rather than a niche capability.”

AI vendors are also reimagining how they package and price offerings to stoke further demand.

IT services aren’t lagging, with spending set to grow 8.3 per cent as organisations ramp up adoptions that centre on the practical integration of AI.

Tachwali advises CIOs to see GenAI as more than a bolt-on for efficiency: “Real competitive advantages will come from robust data foundations, truly flexible technology architectures, and cultivating a workforce fluent in all things AI.”

All told, as MENA governments and enterprises convene around digital transformation and disruptive tech, these investments are positioning the region not just as a fast follower, but as a thought leader and innovator on the global stage.