UAE Launches AI Pilot to Boost Data Center Efficiency in Partnership with Phaidra and Agility
February 6, 2026
The United Arab Emirates has initiated a landmark pilot project to harness artificial intelligence for optimizing energy use in its critical digital infrastructure. The move addresses the growing pressure on data centers, which are significant energy consumers, as AI adoption and digital transformation accelerate globally. Enhancing the efficiency of these facilities is crucial for both economic competitiveness and national sustainability goals, particularly in regions with challenging climates like the Middle East.
The UAE Ministry of Energy and Infrastructure, in collaboration with state-owned data center operator Khazna Data Centers and logistics firm Agility, has signed a Memorandum of Understanding to deploy an AI control system from Seattle-based Phaidra. The pilot will test Phaidra's AI agents across selected campuses within Khazna's extensive portfolio, which comprises approximately 30 operational facilities, with the aim of optimizing power distribution, cooling systems, and workload management. Phaidra claims its technology has demonstrated the potential to reduce energy consumption by up to 40 percent in similar applications.
Key objectives of the initiative are to cut cooling energy use, increase available IT capacity, and improve overall system reliability. The partnership aligns with Khazna's existing collaboration with Nvidia on AI-focused facilities and supports the UAE's broader agenda. “Enhancing the efficiency of energy-intensive infrastructure, especially data centers and artificial intelligence applications, is a key pillar of the UAE’s competitiveness and sustainability agenda,” said Sharif Al Olama, Undersecretary for Energy and Petroleum Affairs at the UAE Ministry.
The implications of this pilot extend beyond immediate efficiency gains. As AI-driven demand reshapes data center requirements, proving the scalability of such AI-driven optimization could set a benchmark for the industry. Tarek Sultan, Chairman of Agility, noted, “This initiative underscores the importance of effective public-private collaboration as AI reshapes global digital and physical infrastructure.” Following the pilot, the partners plan to use the results to assess wider deployment across the UAE to support national energy targets.
Hassan Alnaqbi, CEO of Khazna, emphasized the operator's responsibility in the AI era: “By advancing intelligent efficiency through collaboration, we want to ensure that the infrastructure underpinning AI and digital growth is as sustainable as it is powerful.” The pilot represents a strategic step for the UAE, the region's largest data center market, to maintain its leadership while addressing the dual challenges of digital expansion and environmental stewardship.
Source: datacenterdynamics
