MIDDLE EAST— The World Economic Forum has warned that the rapid growth of artificial intelligence infrastructure and hyperscale data centres across the Middle East and North Africa (MENA) could place major pressure on the region’s electricity grids and water resources if expansion is not supported by sustainable planning.
In a framework developed with SRMG Think, the Forum said countries across the region are moving quickly to position themselves as global AI hubs through major investments in digital infrastructure and partnerships with leading technology companies.
The report noted that AI is expected to generate up to $4.8 trillion in economic value globally by 2033, pushing governments in MENA to invest heavily in hyperscale data centres and advanced computing systems as part of wider economic transformation plans.
However, the Forum warned that infrastructure growth is happening at a time when many countries in the region are already facing rising electricity demand, water scarcity and pressure on existing utility systems.
According to the report, power demand across much of MENA is increasing faster than electricity supply. Installed energy capacity is expected to require a 40% increase by 2030, while current growth projections remain significantly lower, even before the added impact of AI-related demand is fully considered.
“The question is no longer whether the region can build hyperscale capacity. It is whether it can build it sustainably,” the report stated.
The framework introduced by the Forum focuses on what it describes as a “resource–intelligence matrix,” which aims to connect energy planning with AI-driven systems that can better manage electricity use and reduce waste.
The report said data centres vary greatly in efficiency. Facilities that depend heavily on fossil fuel-powered grids and traditional cooling systems face higher operational risks and rising costs. Meanwhile, facilities using renewable energy, advanced cooling technology, and AI-powered energy management systems are seen as more efficient and resilient.
According to the Forum, highly optimized facilities can lower operational costs by 30% to 40% while also improving access to investment and speeding up regulatory approvals.
The report also highlighted the importance of flexible infrastructure design, including modular construction that can reduce development timelines and allow easier upgrades as technology evolves.
Energy demand linked to AI infrastructure is becoming a growing concern globally. Data centres currently account for around 1% to 2% of global electricity demand, a figure projected to rise to 4% by 2030.
In MENA, the impact is expected to be even greater due to high cooling needs and electricity transmission losses that remain above global averages in several countries.
In Lebanon, the discussion comes as the government accelerates its own digital transformation agenda through the recently launched Ministry of State for Technology and Artificial Intelligence and a broader national strategy focused on AI, digital governance and infrastructure modernization.
The Forum warned that AI workloads can create sudden spikes in electricity demand, increasing the risk of grid instability if systems are not properly managed.
Water use is also emerging as a major challenge. Cooling systems can account for up to 40% of a data centre’s electricity consumption, while conventional cooling methods in hot and dry climates can require millions of litres of water every year.
The report added that growing cooling demand could place additional pressure on desalination systems across the region, where producing freshwater already consumes large amounts of energy.
The Forum called for closer coordination between governments, utilities, regulators and technology companies, arguing that hyperscale data centres should be treated as critical infrastructure because of their direct impact on national energy and water security.
It said that better energy diversification, smarter cooling systems, AI-based energy management and stronger regional planning will be essential if MENA countries want to expand their digital infrastructure without increasing pressure on vital resources.
