Uzbekistan Emerges as a Global AI Hub Fueled by Tax Breaks and a Six-Day Workweek
May 4, 2026
Uzbekistan Emerges as a Global AI Hub Fueled by Tax Breaks and a Six-Day Workweek
Uzbekistan is rapidly transforming itself into a global hub for artificial intelligence and data centers, leveraging a unique combination of post-Soviet industrial infrastructure, aggressive tax incentives, and a labor market defined by a six-day workweek. This strategy is drawing significant investment from South Korea, the United States, China, and the Middle East, positioning the Central Asian nation as a key player in the global AI race. The country's efforts have already yielded results, with Oxford Insights ranking Uzbekistan 62nd out of 195 countries in its 'AI Readiness Index 2025,' a jump of 25 spots from the previous year.
A cornerstone of Uzbekistan's appeal is its labor flexibility. Unlike many Western nations that are moving toward reduced working hours, Uzbekistan mandates a six-day workweek within a 40-hour limit, with seven-hour shifts on weekdays and five hours on Saturdays. This structure is particularly efficient for data centers that require 24/7 server operation. With a population of 38 million, predominantly young, the average monthly wage for IT and telecommunications workers is approximately $1,180, roughly one-third of the salary for IT professionals in the Seoul metropolitan area. This cost advantage is a major draw for international firms.
The government has further sweetened the deal with unprecedented fiscal policies. In October 2025, a presidential decree established a tax-free special zone for AI and data centers in the western autonomous republic of Karakalpakstan. Foreign companies investing over $100 million are granted a full exemption from corporate, property, and land taxes, as well as import duties on equipment, until 2040. The government is also directly developing the site and supplying electricity at discounted rates. Officials project that this special zone alone will attract over $1 billion in foreign investment by 2030. The region's desert continental climate, with large daily temperature variations, also allows for 'free cooling' year-round, a significant advantage given that approximately 40% of a data center's power consumption is used for cooling. Its central location on the Eurasian continent also ensures low-latency data transmission connecting Europe, East Asia, and the Middle East.
Global capital is already flowing in. South Korean robotics company Robotis is constructing a 'Physical AI Data Factory' in Tashkent for training humanoid robots. The Uzbek Deputy Prime Minister for Economy designated it a national strategic project, providing nearly 66,000 square meters of land at almost no cost. The facility, which will handle data labeling, actuator production, and robot manufacturing, is scheduled to begin full operation in the fourth quarter of 2026. Around 100 employees have already been hired, with plans to expand to 2,000. "The low labor costs and the government's active attraction efforts played a decisive role," a Robotis official explained.
In another major development, Taiwanese data center firm Keycore Technology Corp (KCT), in alliance with U.S. chipmaker NVIDIA, announced a $130 million investment to build a 'next-generation AI computing data center' in the Karakalpakstan tax-free zone. This marks the first project in the AI tax-free zone. Meanwhile, NASDAQ-listed CoreAI selected Uzbekistan as the top priority target for its $5 billion global AI data center network. DataVault, a data center specialist under Saudi Arabia's Vision Invest, has signed an agreement for a total of 500 megawatts (MW) of data centers, with a 12 MW facility expected to be completed by the end of 2026. Chinese companies, blocked from Western markets by U.S. technology sanctions, are also using Uzbekistan as a key hub for their 'Digital Silk Road.' Following the establishment of the national government cloud, Huawei unveiled a next-generation AI data center roadmap in Tashkent to support Uzbekistan’s $1.5 billion AI development strategy. Telecommunications equipment manufacturer ZTE also secured a contract for a local data center modernization project. An industry insider noted, "Another strength is that Uzbekistan is not hostile to either the U.S. or China, allowing it to stay out of the tariff war."
Source: chosun
