Cloud To Dominate UAE's Digital Transformation Move

The UAE's digital transformation market size is estimated at $1.57 billion in 2025, and is expected to reach $3.29 billion by 2030, according to Mordor Intelligence.

Cloud remains the dominant deployment model, capturing 70% of market share last year, but hybrid architectures and edge computing are gaining traction. Enterprises are shifting from basic cloud migration to intelligent automation, with AI and analytics driving operational intelligence, predictive maintenance, and ESG compliance. UAE enterprises are accelerating digital transformation through a combination of government-led initiatives, hyperscale cloud infrastructure, and AI-driven innovation. Programmes like Operation 300bn and the National Digital Economy Strategy are catalyzing adoption across manufacturing, energy, logistics, and public services.

“Sovereign cloud has emerged as a cornerstone of this transformation, especially in regulated sectors like government, finance, and healthcare. It enables data to be stored, processed, and governed within UAE borders, aligning with national cybersecurity and data protection laws. Solutions like the Core42 Sovereign Public Cloud, which is built on Microsoft Azure and powered by our sovereign controls platform Insight, combines the global scalability and resilience of Azure with locally enforced governance, empowering public and private entities to innovate confidently, knowing their digital operations are protected by local governance and infrastructure,” Jaafar AlHashmi, Acting VP – Government Sector, Core42, told Khaleej Times.

Excerpts from in an interview:

How are you seeing UAE enterprises approach digital transformation today, and what role does sovereign cloud play in that journey?

Beyond compliance, sovereign cloud is becoming a strategic enabler of trust, resilience, and economic competitiveness. It supports the UAE's ambition to be a global tech hub by fostering local innovation ecosystems, reducing dependency on foreign infrastructure, and enabling secure AI deployment. With AI projected to contribute $96 billion to the UAE's economy by 2030 (3.6% of GDP), and data sovereignty positioned as a key enabler of this growth, sovereign cloud is not only enabling regulatory alignment but also empowering organizations to scale AI responsibly, build citizen trust, and unlock long-term value across sectors.

Building on this foundation, Core42's Signature Private Cloud, which is currently live in Customer Preview , delivers full digital sovereignty for sectors managing secret and top-secret data, including defense, national security, public safety, financial services, healthcare, and critical infrastructure. Data is hosted within national borders in G42-owned facilities, managed by security-cleared local staff, and built on open-source and Core42-owned IP. Security is reinforced with tightly controlled physical access, isolated connectivity, air-gapped links, and compliance with global and regional standards. Together, these offerings deliver a comprehensive sovereign cloud ecosystem tailored to the UAE's regulatory landscape and growth ambitions, giving public and private entities choice, flexibility, and control over every stage of their digital transformation journey.

Core42 Sovereign Public Cloud has been live for two years and already supports over 50 customers. What does this growth say about the market's priorities?

We are extremely proud of the response we've received from the market to our Sovereign Public Cloud product. To have already onboarded 50 customers ranging from government entities like the Department of Government Enablement - Abu Dhabi (DGE), UAE Accountability Authority to private companies like First Abu Dhabi Bank, along with various companies within the G42 Group signals a decisive shift in market priorities toward data sovereignty, regulatory compliance, and national digital resilience.

In an era where data is both a strategic asset and a liability, organizations are increasingly seeking cloud solutions that guarantee local data residency and governance. This is especially true in sectors like government, finance, and healthcare, where regulatory frameworks demand strict control over sensitive information. The demand also proves that enterprises no longer view sovereignty as a trade-off to innovation. By leveraging Microsoft Azure's capabilities alongside Core42's proprietary enhancements, customers are able to deploy advanced AI, analytics, and automation solutions within a compliant and secure environment. This balance between advanced technology and regulatory assurance is becoming a key differentiator in cloud adoption strategies, especially in regions with ambitious digital transformation agendas like the We the UAE Vision 2031.

What types of AI workloads and applications are enterprises now comfortable running in the Sovereign Public Cloud?

Enterprises are increasingly comfortable running a wide range of AI workloads in Sovereign Public Cloud environments, particularly those that require high-performance computing, strict data governance, and scalable infrastructure. These include AI-powered fraud detection systems, predictive healthcare diagnostics, and real-time analytics platforms. Sovereign clouds like Core42's offer the necessary compliance and data residency guarantees, making them ideal for sensitive applications in sectors such as finance, government, and healthcare.

Are there any particular sectors leading the way in adopting AI and cloud solutions?

The UAE's robust digital transformation strategies, coupled with public and private investment and a forward-looking regulatory environment, have positioned the country as a global leader in adopting AI and cloud technologies. Sector-wise breakdown and impact analyses show the financial services sector is at the forefront of this shift, with organizations across the space leveraging AI for robo-advisory, credit risk modeling, and digital banking experiences. Healthcare is another major area of focus, with firms using AI for genomics, diagnostics, and cancer screening. These innovations are not only improving operational efficiency but also enhancing patient outcomes and accessibility to care.

Logistics and smart mobility are also seeing rapid transformation through AI-powered platforms that optimize freight matching, automate supply chain processes, and improve road safety through predictive analytics. Cloud computing trends in the UAE also reflect this momentum, with widespread adoption of hybrid and multi-cloud environments to support AI workloads, data sovereignty, and digital transformation across public and private sectors.

What differentiates Core42's offering in terms of service delivery and partnership with customers?

Core42 combines hyperscale technology with sovereign control, giving UAE organizations the confidence to innovate without compromising compliance or security. Our Sovereign Public Cloud, built on Microsoft Azure and operated entirely within the UAE, allows enterprises to access global-scale cloud services under locally governed frameworks. This balance of capability and control is a clear differentiator in highly regulated sectors.

Service delivery is anchored in deep partnerships. We work side-by-side with customers to modernize workloads, design secure AI architectures, and implement solutions aligned with their compliance and business priorities. Core42 offers a full continuum of support, from advisory and architecture design to managed services and on-the-ground engineering, helping transformation programs deliver measurable impact.

Our relationships are built for the long term. We invest in understanding customer roadmaps, co-developing solutions, and providing continuous training and enablement. By coupling global technology partnerships with sovereign infrastructure and local expertise, Core42 empowers organizations to innovate confidently, accelerate time-to-value, and meet strategic objectives at national and enterprise levels.

How does Core42's relationship with Microsoft Azure strengthen the offering for UAE customers?

Our partnership with Microsoft combines the scale and innovation of a global hyperscaler with the assurance of UAE-based sovereign controls. Core42's Sovereign Public Cloud is built on Microsoft Azure and powered by our sovereign controls platform Insight, that delivers full data residency, regulatory alignment, and advanced governance tailored to the UAE's requirements. This means customers get the best of both worlds: access to Azure's global ecosystem of services, AI tools, and security innovation, combined with the guarantees of sovereign infrastructure.

Together, we have shaped a blueprint for secure digital transformation. Through initiatives such as our whitepaper on sovereign cloud's role in the AI era, we help customers navigate regulatory complexity, modernize workloads, and unlock AI capabilities with confidence. The Core42–Microsoft collaboration demonstrates that sovereignty and innovation are complementary, creating a secure, scalable platform for UAE organizations to compete on a global stage.

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