The UAE Ministry of Energy and Infrastructure, UAE state-owned Khazna Data Centers, and logistics firm Agility have launched a pilot project to deploy Seattle-based AI firm Phaidra's control technology to improve energy efficiency across data centers and district cooling systems in the UAE.

Under the terms of the pilot project, which was set out in a non-binding Memorandum of Understanding, Phaidra’s AI agents will be tested across selected Khazna data center campuses to optimize power, cooling, and workload management. Phaidra claims that its platform has proven effective at reducing capital expenditures for data center cooling and lowering energy consumption by up to 40 percent.

The primary aims of the pilot will be to reduce cooling energy use, increase IT capacity, and improve reliability, particularly in high-temperature environments prevalent in the Middle East.

“This initiative underscores the importance of effective public-private collaboration as AI reshapes global digital and physical infrastructure. As AI workloads scale, infrastructure efficiency becomes a binding constraint,” said Tarek Sultan, chairman of Agility.

According to the companies, the initiative aligns with Khazna’s ongoing collaboration with Nvidia, which includes building AI-focused facilities using the Nvidia DSX Blueprint architecture.

Sharif Al Olama, undersecretary for Energy and Petroleum Affairs at the UAE Ministry of Energy and Infrastructure, said: “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. This partnership comes within the framework of adopting practical solutions based on advanced technology, which contribute to reducing energy consumption, enhancing the reliability of the infrastructure, and advancing the country’s leadership in developing the new generation of artificial intelligence data centers.”

Following the pilot, the companies intend to use the results to assess whether AI-driven optimization can be scaled more widely across the UAE in support of national energy efficiency and sustainability targets.

“AI-driven demand is fundamentally reshaping the requirements of modern data centers. As the operators powering tomorrow’s digital economies, we carry a clear responsibility: to scale sustainably while enabling nations to achieve their digital and AI ambitions,” said Hassan Alnaqbi, CEO of Khazna. “This pilot reflects that commitment. 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.”

Khazna reportedly has around 30 operational data centers, with more under construction. It merged with G42 and e&'s data center operations in October 2021, a deal that made Khazna the UAE’s largest data center provider. MGX and Silver Lake recently invested in the firm, with e& exiting its stake.

Domestically, Khazna is currently developing several new projects, including hyperscale facilities in Abu Dhabi, Dubai, and Ajman. Khazna is also delivering the infrastructure layer for Stargate UAE.

The company is also developing a 1GW site (two 500MW phases) outside Milan in Italy in partnership with Italian energy firm Eni. It is also developing a facility in Cairo, Egypt.