A Region Transforming Through Intelligent Infrastructure Practices

A Region Transforming Through Intelligent Infrastructure Practices

Aerial view of Muscat, Oman, showcasing the coastline, urban architecture, and surrounding mountains. by Smitesh Parekh via pexels

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Middle East Building Automation Market Set to Surge with Smart City Boom and Sustainability Push

Rising urbanization, energy efficiency demands, and smart infrastructure investments are driving a transformative decade for building automation across the Middle East.

By Mohini
Published by Futurism 5 May 2026

Introduction: A Region Transforming Through Intelligent Infrastructure

The Middle East is undergoing a profound transformation—one that is redefining how cities are built, managed, and experienced. At the heart of this shift lies building automation, a technology-driven approach that integrates systems such as HVAC, lighting, security, and energy management into a unified, intelligent ecosystem.

According to Renub Research, the Middle East Building Automation Market is projected to grow from US$ 6,842.33 million in 2025 to US$ 16,306.28 million by 2034, expanding at a robust CAGR of 10.13% during 2026–2034.

This impressive growth reflects a convergence of powerful forces—rapid urbanization, government-led smart city initiatives, rising energy costs, and increasing demand for sustainable, high-performance buildings.

Understanding Building Automation: The Backbone of Smart Infrastructure

Building automation refers to the integration of advanced technologies—sensors, controllers, software platforms, and communication networks—to automate and optimize building operations.

From regulating temperature and lighting to enhancing security and fire safety, these systems offer:

  • Real-time monitoring and control
  • Predictive maintenance
  • Energy optimization
  • Enhanced occupant comfort

In a region known for extreme climatic conditions, such as the Middle East, these capabilities are not just beneficial—they are essential.

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A Region Transforming Through Intelligent Infrastructure Practices

Key Growth Drivers Shaping the Market

1. Rapid Urbanization and Mega Infrastructure Projects

The Middle East is witnessing one of the fastest urbanization rates globally. Countries across the Gulf Cooperation Council (GCC) are investing heavily in large-scale infrastructure projects, including:

  • Smart cities
  • Airports and transport hubs
  • Luxury residential complexes
  • Commercial towers and mixed-use developments

By 2050, nearly 90% of GCC populations are expected to reside in urban areas, creating immense demand for efficient building management systems.

Mega-events such as the AFC Asian Cup 2027, Asian Winter Games 2029, Expo 2030, and FIFA World Cup 2034 are further accelerating infrastructure development, particularly in Saudi Arabia.

2. Government-Led Smart City Initiatives

Governments across the region are actively promoting digital transformation through ambitious smart city programs.

For example:

The UAE has committed over USD 1 billion toward smart infrastructure initiatives.

Saudi Arabia’s Vision 2030 emphasizes sustainable urban development and intelligent infrastructure.

These initiatives aim to:

  • Reduce carbon emissions
  • Optimize energy consumption
  • Enhance urban living standards

Building automation plays a central role in achieving these goals by enabling efficient, data-driven building management.

3. Rising Demand for Energy Efficiency

Energy consumption in the Middle East is significantly driven by cooling requirements. With soaring electricity costs and environmental concerns, building owners are increasingly adopting automation systems that:

  • Adjust energy usage based on occupancy
  • Optimize HVAC performance
  • Reduce wastage

This not only lowers operational costs but also aligns with global sustainability targets.

4. Enhanced Focus on Occupant Comfort

Modern buildings are no longer just structures—they are experiences. High-end commercial and residential developments prioritize:

  • Indoor air quality
  • Lighting personalization
  • Temperature control

Building automation ensures a seamless, comfortable environment, making it a critical factor in premium real estate projects.

Market Challenges: Barriers to Widespread Adoption

1. High Initial Investment Costs

Despite long-term benefits, the upfront cost of implementing building automation systems remains a significant challenge.

Expenses include:

  • Advanced sensors and controllers
  • Software platforms
  • Integration with existing infrastructure

Retrofitting older buildings can be particularly costly, limiting adoption among small and medium-scale property owners.

2. Shortage of Skilled Workforce

The deployment and maintenance of sophisticated automation systems require specialized expertise in:

  • Software engineering
  • Networking
  • System integration

The region currently faces a shortage of trained professionals, often relying on international expertise, which increases costs and project timelines.

Segment Insights: Expanding Across Multiple Dimensions

1. Fire Protection Systems Integration

The integration of fire safety systems with building automation is becoming increasingly critical.

Modern systems offer:

  • Real-time monitoring
  • Automated alerts and responses
  • Enhanced safety compliance

This is particularly important in high-rise buildings and large public spaces, where fire risks can be catastrophic.

2. Security and Access Control Systems

Security infrastructure is evolving rapidly with the adoption of:

  • Biometric authentication
  • RFID and smart cards
  • Mobile-based access systems

Integration with automation platforms allows for centralized control and real-time threat detection, enhancing overall building security.

3. Commercial vs. Residential Adoption

While both segments are growing, commercial buildings dominate the market due to:

  • Higher energy consumption
  • Complex operational requirements
  • Need for centralized management

Hotels, malls, airports, and office complexes are leading adopters of building automation technologies.

4. Hardware and Software Evolution

The market is witnessing rapid advancements in both hardware and software components:

Hardware: Sensors, actuators, controllers, energy meters

Software: Cloud-based platforms, AI-driven analytics, predictive maintenance tools

The shift toward digital platforms is enabling smarter, more efficient building management.

Country-Level Insights: Regional Leaders Driving Growth

Saudi Arabia: Vision 2030 Leading the Way

Saudi Arabia is at the forefront of building automation adoption, driven by:

  • Mega-projects like NEOM
  • Smart city developments
  • Sustainability initiatives

The country’s extreme climate further necessitates efficient HVAC and energy management systems.

United Arab Emirates: A Pioneer in Smart Buildings

Cities like Dubai and Abu Dhabi are global leaders in smart infrastructure.

The UAE’s focus on:

  • Green buildings
  • Carbon reduction
  • Luxury real estate

has accelerated the adoption of automation technologies across sectors.

Kuwait and Emerging Markets

Smaller markets like Kuwait are gradually embracing building automation due to:

  • Infrastructure investments
  • Rising awareness of energy efficiency
  • Demand for modern living standards

Competitive Landscape: Key Players Driving Innovation

The Middle East building automation market is highly competitive, with global giants leading technological advancements.

Major players include:

  • Siemens AG
  • Honeywell International Inc.
  • LG Electronics
  • Hitachi, Ltd.
  • Schneider Electric
  • Electrolux
  • Samsung
  • Haier Inc.

These companies are investing heavily in innovation, partnerships, and regional expansion to strengthen their market position.

Recent Developments

  • ABB launched its Cylon Smart Building Management System in the Middle East, offering scalable automation solutions.
  • Honeywell International Inc. introduced self-testing fire alarm systems, enhancing safety and maintenance efficiency.
  • Siemens AG expanded its smart infrastructure portfolio for Middle Eastern projects.
  • Schneider Electric partnered with regional developers to deploy AI-driven energy management systems.
  • Samsung integrated IoT-based smart home solutions into luxury residential projects.
  • LG Electronics launched advanced HVAC systems tailored for extreme climates.
  • Hitachi, Ltd. enhanced its building automation software with predictive analytics features.
  • Haier Inc. expanded its smart appliance ecosystem in the Gulf region.
  • Electrolux introduced energy-efficient solutions for commercial buildings.
  • ABB showcased integrated automation solutions at major regional exhibitions.

Future Outlook: A Decade of Intelligent Growth

The future of the Middle East building automation market is undeniably promising. With continuous investments in smart infrastructure, the region is poised to become a global leader in intelligent building solutions.

Key trends shaping the future include:

  • Integration of Artificial Intelligence and Machine Learning
  • Expansion of IoT-enabled devices
  • Increased adoption of cloud-based platforms
  • Focus on sustainability and carbon neutrality

As cities become smarter and more connected, building automation will serve as the backbone of this transformation.

Final Thoughts

The Middle East building automation market is not just growing—it is evolving into a cornerstone of modern urban development. With a projected market size exceeding US$ 16 billion by 2034, the region is setting new benchmarks in smart infrastructure and sustainability.

While challenges such as high costs and skill shortages persist, ongoing technological advancements and government support are expected to overcome these barriers.

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Geo-economic Positioning of Pakistan in MENA

Geo-economic Positioning of Pakistan in MENA

Aerial night shot of Karachi, Pakistan, showcasing the vibrant city lights and urban sprawl. by Tahamie Farooqui via pexels

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Geo-economic positioning of Pakistan and its attachment with MENA

Business Recorder Published May 5, 2026  

According to breaking news in Pakistani media, the World Bank has officially reclassified Pakistan from its South Asia regional grouping to the Middle East and North Africa (MENA) region for financial and analytical reporting, and this change will take effect in the World Bank’s reporting for the 2026 fiscal year.

The new group will be called the ‘North Africa, Middle East, Afghanistan, and Pakistan (MENAAP) region’. This move indicates collective economic structures, strengthening economic ties with the Gulf region, and regional logistic links. In this way, Pakistan will now be evaluated beside economies like Saudi Arabia, Iran, the UAE, Kuwait, Iraq, Syria, Libya, Egypt, and Morocco in World Bank reports, separating it from the South Asian countries: India, Bangladesh, Sri Lanka, Nepal, Maldives, and Bhutan.

Generally, Pakistan has been considered a part of South Asia, and the majority of international organizations and global think tanks include it in the South Asian group. Its sharing history with Bangladesh and India, and the founding membership of the South Asian Association for Regional Cooperation (SAARC) reflects its association with South Asia. With some exceptions, the same position is applicable in the case of Afghanistan.

Pakistan and Afghanistan are also members of the Central Asia Regional Economic Coope ration (CAREC) and the Economic Cooperation Organization (ECO). This indicates their active participation in the multilateral collaboration with the Central Asian countries. The Silk Road, sharing history, common political heritage, and similarity in culture, ethnicity, and languages, associates these countries with Central Asia.

The strategic location of Pakistan at the junction of South Asia, the Middle East, and Central Asia justifies the possibility of its attachment with all three regional groups. Apparently, the listing of Pakistan and Afghanistan in the MENAAP group, during the Israel/ USA-Iran war, creates ambiguities for geo-economic strategies and future planning.

The Middle East and North Africa region (MENA) is a loosely defined area spanning from Morocco to Iran. The IMF and World Bank include all 21 Arab League nations plus Djibouti, Mauritania, Somalia, Sudan, Iran, and Israel in this group. This group (MENA) is characterized by high, yet varied, economic dependence on natural resources (mainly oil and gas), significant water scarcity, and shared environmental challenges.

The Middle East and North Africa region (MENA) exists as an alternative to the concept of the Greater Middle East, which comprises the bulk of the Muslim world. However, the region has no standardized definition, and groupings may vary. The different organizations define the region as consisting of different territories.

The International Monetary Fund (IMF) includes Afghanistan, Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Pakistan, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, United Arab Emirates, and Yemen in the list of the Middle East and North Africa (MENA) since 2003. However, the World Bank also includes Israel and Malta in the list of the Middle East and North Africa (MENA). But Afghanistan, Pakistan, Mauritania, Somalia, and Sudan have not been included in the World Bank list. Now, the World Bank has included Pakistan and Afghanistan in this list.

The comparison of the economies in South Asia and the ‘Middle East and North Africa’ shows the significant disparities between these two regions. Based on per capita income, all South Asian countries are classified as middle-income countries. However, 8 high-income countries are included in the list of the Middle East and North Africa. Excluding the high-income countries, the aggregate gross domestic product (GDP) of the Middle East and North Africa is 2.2 trillion US dollars, which is 4.5 trillion US dollars (almost double) in the case of South Asia. The per capita income of the Middle East and North Africa is 2971 US dollars, which is 2690 US dollars for South Asia. Obviously, this average is completely changed after the inclusion of 8 high-income countries in the Middle East and North Africa. In comparison, of gross domestic product (GDP) and per capita income, Pakistan is much behind the average of South Asia and the Middle East and North Africa, while Afghanistan is not even comparable.

The share of industry in the gross domestic product of Pakistan is around 20 percent, which is more than 25 percent in the case of South Asia, and 33 percent in the case of the Middle East and North Africa (excluding high-income countries). The most incomparable socioeconomic indicator is poverty. More than 47 percent of the population of Afghanistan, and more than 21 percent of the population of Pakistan, earn less than 3 US dollars in a day. This ratio is 14.4 percent in the case of the Middle East and North Africa and 3.8 percent in South Asia.

The most important indicator that does not match Pakistan with the Middle East and North African economies is the inflow of foreign investment. From the foreign investment point of view, Pakistan does not seem to be a part of the Middle East and North Africa. The net inflow of foreign direct investment as a percentage of gross domestic product is 0.7 percent in Pakistan, and this is the same on average for South Asian countries. The average inflow of foreign direct investment as a percentage of gross domestic product is 3.8 percent in the countries in the Middle East and North Africa. Even after the exclusion of high-income countries, it is 2.3 percent in the Middle East and North Africa. The world average of the net inflow of foreign direct investment as a percentage of GDP is 1.3. This shows that the countries in the Middle East and North Africa have the capacity to attract foreign investment.

The shares of exports and trade in the gross domestic product of Pakistan indicate a trade deficit. The share of trade is more than double its exports, which shows that the size of imports is greater than exports. A similar position is depicted by South Asia.

However, Pakistan is facing the worst situation in external debts. The magnitude of its external debt is nearly 34 percent of its GDP, which is 20 percent in Afghanistan. The average external debt of the countries in South Asia is also 20 percent, and 27 percent in the case of the Middle East and North Africa.

Copyright Business Recorder, 2026

Dr Ayub Mehar

The reviewer is a professor at Iqra University Karachi

The Drive to Build and the Imperative to Preserve: A Discussion

The Drive to Build and the Imperative to Preserve: A Discussion

Panoramic skyline of Gurugram with clear blue skies and vibrant cityscape by Lokesh Kumar via Pexels

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The drive to build and the imperative to preserve

 
© Pexels/Furkan Isik
© Pexels/Furkan Isik

Architecture transforms space, yet sustainability is an invitation to restraint: a fundamental challenge of contemporary construction opens up between these two principles. We discussed this with Professor Ena Lloret-Fritschi and Professor Muck Petzet, Director and Co-Director of the new Institute of Sustainable Architecture and Technology (IAST) at the USI Academy of Architecture, in a contribution produced in collaboration with laRegione.

Architecture is, by definition, an act of transformation. It shapes space to meet human needs, designing buildings and environments of various types and uses. Yet, every construction intervention inevitably involves a loss: something is altered, removed, or destroyed. Sustainability, on the other hand, aspires to minimise environmental impact. Bringing these two concepts together reveals a fundamental tension-almost an oxymoron-between the drive to build and the imperative to preserve.

We discussed this tension, as well as the meaning of sustainable architecture today and future challenges, with Professor Ena Lloret-Fritschi and Professor Muck Petzet. The institute-officially inaugurated on 16 April-brings together expertise in heritage, construction, reuse, structural engineering, and digital technologies, aiming to approach sustainability in an integrated, multidisciplinary way.

What does it mean to practice sustainable architecture?

For Prof. Muck Petzet, the result of pairing architecture and sustainability defines an important starting point. “Building new structures requires considerable resources and energy and therefore has a significant environmental impact. Quoting Luigi Snozzi: ’Every intervention involves destruction; destroy with intelligence.’ As architects, we have a responsibility to question the necessity of the act itself. We must ask ourselves if an intervention, and particularly a new construction, is truly necessary, or if we can work with what already exists.” In this view, reuse is not just one choice among many, but the priority approach. Prolonging the life of buildings by adapting them and preserving their material and cultural value reduces both emissions and resource consumption. “Temporary structures concentrate their emissions into a short window, whereas durable buildings allow that environmental cost to be spread over time,” observes Muck Petzet. Sustainability, in this sense, begins with continuity rather than replacement.

Prof. Ena Lloret-Fritschi, for her part, frames the issue from a complementary perspective, focusing on how to act when intervention becomes necessary. “Practising sustainable architecture means, first and foremost, becoming aware of the impact of every single intervention.” The challenge isn’t about avoiding transformation altogether; instead, it’s about defining concrete paths to act with responsibility and precision, aware of the environmental price of every choice. This requires the development of tools that foster a deeper and faster understanding of existing buildings, revealing their structures, constraints, and potential from the earliest stages of the design process. Thanks to digital technologies and AI integration, it is now possible to thoroughly analyse a building in the preliminary phases, thereby defining targeted intervention strategies. In this light, technology becomes the driver of more conscious and informed action.

At IAST, this approach follows a clear hierarchy of interventions: first, reuse and repair; then, transformation; and, only as a final stage, demolition and new construction. In this context, sustainability is not an accessory, but the very essence of the principles that guide every choice at every level of design. This also implies a change in mindset regarding what we preserve, what we transform, and what we remove. Instead of maximising production, the focus shifts to reducing material use, responsible material selection, and optimising structural systems. The goal is not merely to contain impact, but to create resilient architectures-works capable of lasting, being repaired, and evolving with the climate. In this new paradigm, structural simplicity and robustness become the guiding criteria to eliminate complexity and reduce maintenance costs whenever possible.

The entire life cycle of all components

More broadly, IAST’s work is part of a larger disciplinary shift toward a culture of durability. Buildings are increasingly understood not as short-lived objects, but as structures that should endure, adapt, and be valued over time. This transition is the subject of heated debate regarding post-war building stock. Although often considered obsolete or lacking aesthetic merit, these structures contain precious materials and large amounts of stored carbon; their recovery therefore represents an extraordinary opportunity for the environment. In this context, the work developed at the institute spans different but closely related domains. It includes the conservation and transformation of modernist buildings, where repair becomes a central strategy, as well as the careful evaluation and adaptation of existing structures alongside the design of new ones. Structural considerations play a key role at all levels of intervention, ensuring safety, durability, and the efficient use of material resources.

This perspective also extends to more recent building heritage. Many structures from the 80s and 90s are reaching a point where intervention is necessary, yet they are often demolished to allow for urban densification. This raises an important question: how can we balance the need for transformation with the responsibility to preserve and reuse what already exists? For Prof. Lloret-Fritschi, sustainability is also “a matter of processes and material flows,” from extraction to transformation, assembly, and eventual reuse. Even when intervention is necessary, how materials are used becomes central. Ideally, this includes consideration of the entire life cycle, even if this remains a goal rather than a fully achievable condition.

Design, material, fabrication, and structural integrity must be conceived together. Geometry can become an important lever for reducing material use, while durability remains essential. In parallel, the production of structural elements must be conceived to promote a circular economy and reduce waste, aiming to optimise the use of matter. In this way, design choices are inextricably linked to construction processes and resource management. Prof. Muck Petzet completes this vision by emphasising the importance of context: “We can learn a lot from vernacular architecture,” he observes, pointing to the intelligence inherent in local materials and design capable of responding to the climate. At the same time, globally sourced materials remain an integral part of contemporary construction but require more careful evaluation: “Thinking sustainably also means resisting the logic of the cheapest option and considering the broader consequences, including the impact on local economies.”

Buildings integrated into their context

This reflects a broader condition: while knowledge can circulate globally-supported by digital technologies-materials remain tied to the place. The task is therefore to navigate between these scales, making informed decisions that respond to both the context and its constraints. Energy remains an important aspect, but both architects emphasise that it is only part of the equation. Passive strategies-orientation, natural ventilation, and thermal mass-remain fundamental. The buildings themselves can act as environmental systems, regulating the climate through their material and spatial properties rather than relying exclusively on technical systems. For the Director of IAST, this implies rethinking design priorities: “Geometry, structure, and materials offer great potential, but they must be considered together from the start.” Performance should not be an afterthought added to a project, but integrated into its conception. In this sense, technology supports a more efficient and precise use of resources. At the same time, both USI professors emphasise that sustainability cannot be reduced to simplified certifications or metrics. “There is no single solution,” notes Lloret-Fritschi. “Sometimes it makes sense to use earth, sometimes wood, sometimes concrete: the key is making conscious choices.” Digital tools can assist in this process, but they do not replace judgment. And economic constraints remain a central challenge. Often, sustainability clashes with the logic of immediate savings. Reuse can be complex and expensive, while new construction is often cheaper. As Muck Petzet observes, “if we focus only on the lowest cost, sustainability becomes unreachable.” This highlights the need to shift from initial cost to long-term value.

A mindset

Ultimately, the vision of the two architects converges on an essential point: sustainability is not an accessory to be added to a project, but a mindset (forma mentis) that pervades every phase, from the radical choice of whether to build or not, to the methods of intervention, to the building’s performance in the long term. The current transformation of cities, increasing resource constraints, and changed environmental conditions make this shift necessary and urgent. The question is no longer whether to build sustainably, but how to do so responsibly and realistically. For Prof. Muck Petzet, the direction is clear: “In the future, sustainable architecture will not remain a choice; it will become the norm.” Director Lloret-Fritschi adds that this transition will depend not only on innovation but also on the care with which we work with what already exists. At IAST, these perspectives merge. The institute positions itself at the intersection of heritage and construction, reuse and innovation, structure and technology, approaching sustainability not as a predefined model, but as a method of practice and research. It is an approach that begins with a careful understanding of what already exists, prioritises reuse and repair, and only then considers transformation and new construction, aiming to build less, build better, and build to last.

Produced and published in collaboration with laRegione.

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Mustafa Suleyman: AI Development Will Keep Advancing

Mustafa Suleyman: AI Development Will Keep Advancing

A man working on website design and coding at a home office with a dual monitor setup. by Lisa from Pexels via pexels

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Mustafa Suleyman: AI development won’t hit a wall anytime soon—here’s why

The compute explosion is the technological story of our time. And it is still only just beginning.

April 8, 2026
Mustafa Suleyman: AI Development Will Keep Advancing

An abacus, a slide rule, a calculator, an old desktop computer and a GPU shown along a line of progress

Courtesy of Microsoft

We evolved for a linear world. If you walk for an hour, you cover a certain distance. Walk for two hours and you cover double that distance. This intuition served us well on the savannah. But it catastrophically fails when confronting AI and the core exponential trends at its heart.

From the time I began work on AI in 2010 to now, the amount of training data that goes into frontier AI models has grown by a staggering 1 trillion times—from roughly 10¹⁴ flops (floating-point operations‚ the core unit of computation) for early systems to over 10²⁶ flops for today’s largest models. This is an explosion. Everything else in AI follows from this fact.

The skeptics keep predicting walls. And they keep being wrong in the face of this epic generational compute ramp. Often, they point out that Moore’s Law is slowing. They also mention a lack of data, or they cite limitations on energy.

But when you look at the combined forces driving this revolution, the exponential trend seems quite predictable. To understand why, it’s worth looking at the complex and fast-moving reality beneath the headlines.

Think of AI training as a room full of people working calculators. For years, adding computational power meant adding more people with calculators to that room. Much of the time those workers sat idle, drumming their fingers on desks, waiting for the numbers to come through for their next calculation. Every pause was wasted potential. Today’s revolution goes beyond more and better calculators (although it delivers those); it is actually about ensuring that all those calculators never stop, and that they work together as one.

Three advances are now converging to enable this. First, the basic calculators got faster. Nvidia’s chips have delivered an over sevenfold increase in raw performance in just six years, from 312 teraflops in 2020 to 2,250 teraflops today. Our own Maia 200 chip, launched this January, delivers 30% better performance per dollar than any other hardware in our fleet. Second, the numbers arrive faster thanks to a technology called HBM, or high bandwidth memory, which stacks chips vertically like tiny skyscrapers; the latest generation, HBM3, triples the bandwidth of its predecessor, feeding data to processors fast enough to keep them busy all the time. Third, the room of people with calculators became an office and then a whole campus or city. Technologies like NVLink and InfiniBand connect hundreds of thousands of GPUs into warehouse-size supercomputers that function as single cognitive entities. A few years ago this was impossible.

These gains all come together to deliver dramatically more compute. Where training a language model took 167 minutes on eight GPUs in 2020, it now takes under four minutes on equivalent modern hardware. To put this in perspective: Moore’s Law would predict only about a 5x improvement over this period. We saw 50x. We’ve gone from two GPUs training AlexNet, the image recognition model that kicked off the modern boom in deep learning in 2012, to over 100,000 GPUs in today’s largest clusters, each one individually far more powerful than its predecessors.

Then there’s the revolution in software. Research from Epoch AI suggests that the compute required to reach a fixed performance level halves approximately every eight months, much faster than the traditional 18-to-24-month doubling of Moore’s Law. The costs of serving some recent models have collapsed by a factor of up to 900 on an annualized basis. AI is becoming radically cheaper to deploy.

The numbers for the near future are just as staggering. Consider that leading labs are growing capacity at nearly 4x annually. Since 2020, the compute used to train frontier models has grown 5x every year. Global AI-relevant compute is forecast to hit 100 million H100-equivalents by 2027, a tenfold increase in three years. Put all this together and we’re looking at something like another 1,000x in effective compute by the end of 2028. It’s plausible that by 2030 we’ll bring an additional 200 gigawatts of compute online every year—akin to the peak energy use of the UK, France, Germany, and Italy put together.

What does all this get us? I believe it will drive the transition from chatbots to nearly human-level agents—semiautonomous systems capable of writing code for days, carrying out weeks- and months-long projects, making calls, negotiating contracts, managing logistics. Forget basic assistants that answer questions. Think teams of AI workers that deliberate, collaborate, and execute. Right now we’re only in the foothills of this transition, and the implications stretch far beyond tech. Every industry built on cognitive work will be transformed.

The obvious constraint here is energy. A single refrigerator-size AI rack consumes 120 kilowatts, equivalent to 100 homes. But this hunger collides with another exponential: Solar costs have fallen by a factor of nearly 100 over 50 years; battery prices have dropped 97% over three decades. There is a pathway to clean scaling coming into view.

The capital is deployed. The engineering is delivering. The $100 billion clusters, the 10-gigawatt power draws, the warehouse-scale supercomputers … these are no longer science fiction. Ground is being broken for these projects now across the US and the world. As a result, we are heading toward true cognitive abundance. At Microsoft AI, this is the world our superintelligence lab is planning for and building.

Skeptics accustomed to a linear world will continue predicting diminishing returns. They will continue being surprised. The compute explosion is the technological story of our time, full stop. And it is still only just beginning.

Mustafa Suleyman is CEO of Microsoft AI.

The Global City Race: Infrastructure and Innovation

The Global City Race: Infrastructure and Innovation

Aerial shot of Dubai’s urban cityscape, featuring skyscrapers and intricate highways, by Mahdi Daldawala via Pexels

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The Global City Race: Competing Through Traditional and New Infrastructure

From transport networks to digital twins, infrastructure increasingly determines whether cities attract talent, investment and innovation – or fall behind in the global urban race.
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Giovanni Maria Della Gatta, ISPI Junior Research Fellow

Tobia Zevi, ISPI Senior Associate Research Fellow

In ancient times, cities used to compete for access to natural assets such as rivers, waterfronts and mountains. Farmable and fertile lands, protection and access to trade routes all represented critical resources to survive. Therefore, competition against other cities to control these resources was often unavoidable. While times changed, the quest for resources did not, especially for those cities that lead economic development. Smooth access to trade corridors is now relevant more than ever, and, in light of this, mobility infrastructures play a pivotal role in shaping competitiveness.

Today, Global cities require for a different set of critical inputs and, in fact, the competition shifted from controlling natural physical resources to attracting talent, capital and firms.  As a consequence, they also became incubators where innovation flourished and, through clusterised approaches and specific frameworks, was nurtured and translated into tangible outcomes. In this light, infrastructures represent a key enabler of that competition.

International hubs are not born, they are built through forward looking policies that consider both present and future issues to provide the best possible services and environment conditions for citizens and businesses. While not being a completely zero-sum game, companies’ location decisions, which create jobs, talents preferences that drives innovation and investment decisions which provide funding are all simultaneously necessary and closely linked to the quality and quantity of services available in a particular geographical location. Of course, the social dimension is increasingly becoming an important variable in relocation decisions highlighting how the “human” component of a city can tip the scales.

For those cities that sit on the edge of innovation and strive for further economic development, these three factors (talents, companies and investments) are not optional but constitute the fundamental inputs they must attract in order to stay in the race and lead economic and social growth.

In this competition, infrastructures represent a critical enabler for growth which becomes central in accessing and providing services. In this light, physical and digital infrastructures play different but complementary roles: mobility infrastructures, for example, allow for a larger talent catchment area in the region surrounding Global Cities and also reduce constraints in terms of relocation preferences for the inward flow of foreign workers. Meanwhile, the adoption and implementation of digital infrastructure can enable the improvement and expansion of  services by reducing negative externalities.

Infrastructure investments play different roles depending on urban scale, complexity and infrastructure endowment. In medium sized cities, physical mobility development mainly addresses accessibility gaps and generates direct economic effect, positive externalities and sustainability effects. In advanced and more complex urban environments such as Global Cities, the adoption of digital technologies increasingly supports both planning through real time data gathering and infrastructure performance through system wide optimisation. The need for infrastructural development was also underlined by McKinsey in their 2025 report. They estimate that by 2024 $106 trillion will be required to meet the need for new and updated infrastructures broken down in 7 sectors: transport and logistics ($36 trillion), energy and power ($23 trillion), digital ($19 trillion), social ($16 trillion), waste and water infrastructures ($6 trillion), agriculture ($5 trillion) and defense (2 trillion).

Unfortunately, progress is not homogeneous and the process of urbanisation is uneven. High income economies show degrees or urbanisation close to 80% and continents like Europe benefit from long historical infrastructure inheritance: the road and water networks the Roman empire spread throughout the continent has been further expanded and integrated with a relatively high density rail system which connects most cities and that has been recognised by the EU, through the TEN-T Regulation,  as a fundamental backbone of European freight and citizens mobility . Nonetheless, in 2025, expanding public transport was the single biggest mobility priority for 60% of European mayors, according to Eurocities Pulse survey, alongside developing multimodal integrated systems. Economic issues such as insufficient funding aside, aging or inadequate infrastructure represented one of the main challenges for European mayors. These trends highlight the continued importance of investment in urban mobility infrastructure, particularly in cities where accessibility gaps remain significant.

Thessaloniki provides a contemporary example of how major transport infrastructure can reshape a medium-sized urban ecosystem. Historically characterised by high car dependency and limited public transport capacity, the city experienced a structural shift with the opening of its first metro line in 2024. As a fully automated rapid transit system connecting key areas along an east-west axis, the metro introduced a significant accessibility improvement reducing travel times of trips that required 40 minutes by car to 17 minutes, increasing the reliability of urban mobility while also having a positive impact on car use (15% reduction in downtown traffic) and emissions (estimated decrease of about 212 tonnes per day).

These accessibility gains are already generating early economic effects. Improved connectivity to central districts has increased footfall and accessibility for businesses, particularly in retail, hospitality and service sectors. Areas surrounding metro stations are beginning to attract new investment, reflecting typical patterns of transit-oriented development. At the same time, enhanced mobility supports broader urban productivity by expanding labour markets’ catchment area and facilitating agglomeration effects. The metro has also strengthened the city’s attractiveness for tourism and external investment, reinforcing its role as a regional hub.

The long-term economic transformation of the city will depend on future network extensions, integration with other transport modes and complementary urban policies. However, this case illustrates how mobility infrastructure can act as a catalyst for economic change by fundamentally improving accessibility and enabling wider urban dynamics to unfold.

While the Thessaloniki case underlines the role of physical infrastructure in addressing accessibility gaps and generating local economic effects, such approaches become less effective in larger and more complex urban systems, where the challenge shifts from expanding capacity to increasing performance efficiency of existing networks.

Singapore provides a contrasting example of how infrastructure contributes to economic performance in large and highly complex urban systems. Unlike medium-sized cities where physical accessibility remains a primary constraint, Singapore’s challenge lies in managing density, limited land and the increasing complexity of interconnected urban systems. In this context, the development of a digital twin platform, often referred to as “Virtual Singapore”, represents a shift from expanding infrastructure to increasing its performance efficiency through data-driven technologies.

The digital twin integrates real-time and geospatial data across multiple domains, including transport networks, land use, environmental conditions and population dynamics. This enables authorities to simulate urban scenarios, test infrastructure interventions before implementation and monitor system performance continuously. In the mobility sector, such capabilities support traffic optimisation and demand forecasting and more efficient allocation of resources, reducing congestion and improving network reliability. More broadly, the platform enhances planning precision and reduces uncertainty, allowing for faster and more informed decision-making.

These improvements translate into indirect but significant economic benefits. By increasing the efficiency of existing infrastructure and minimising planning errors, digital systems contribute to higher urban productivity and better use of scarce resources. At the same time, Singapore’s leadership in smart city technologies reinforces its attractiveness for global investment, innovation and high-skilled labour.

However, the effectiveness of such systems depends on strong institutional capacity, data governance and continuous technological investment. The Singapore case therefore illustrates how, in large urban systems, digital infrastructure plays an increasingly important role in enhancing the performance and economic value of existing physical networks through system-wide optimisation.

Both examples show how infrastructures represent a critical enabler of economic growth. In urban environments where accessibility gaps are still relevant, even basic mobility infrastructure and investment can have significant impacts in increasing citizens’ life quality, by reducing congestion, emission and increasing social inclusion. In Global Cities, where basic infrastructures often already exist, the challenge for urban planners is how to optimise the service and improve efficiency. In this context, the rationale must shift from technology oriented to goal oriented: adoption and integration of digital tools is useful only if it has a real measurable impact on service performance. These effects also shape the urban environment and its competitiveness not only in absolute terms but also in comparison to other urban environments, determining the attractiveness a Global City can project.

This Dossier aims to analyse the fields where competition between cities can determine a model’s success or its demise. On this journey, even the concept of competition between Cities will be challenged, highlighting how, nowadays, it narrows the narrative, missing three focal points: (i) while pursuing talent and tourist attraction, competition without holistic planning might create negative externalities for citizens, with perceived successes that may in fact be short lived, as highlighted in different guises by Steven Pedigo, Bo Nielsen & Christian Amussen and Harold Goodwin; (ii) Cities’ governance, as underlined by Francesco Billari, is still inadequate to address the scale of the challenges ahead, in a geopolitical context where national governments, while struggling, do not delegate decision making to urban policymakers; (iii) Cooperation is not optional in light of an increasing need for resources that no one can really access alone, as argued by Paolo Glisenti, and becomes paramount to imagine the future of cities in a world where the boundaries of urban environments continue to grow every day.

The novelty of this analysis is rooted in its challenge to mainstream competition narrative. The pursue of economic and status gains cannot happen at the expense of citizens, especially in times when cities increasingly find themselves facing challenges they are not capable of withstanding alone.

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