How War is Damaging the Middle East's Data Centre Ambitions

The drone strikes that damaged three Amazon Web Services data centres in the United Arab Emirates and Bahrain this month have put the region’s AI ambitions on ice.

Since airstrikes began on 28 February, Amazon has confirmed that two of its facilities in the UAE were directly hit and a third in Bahrain was damaged by a nearby blast.

The strikes have disrupted the flow of power to the facilities, as well as triggering fires and water damage that will take “prolonged” work to fix.

Iran’s Islamic Revolutionary Guard Corps claimed responsibility for the attacks, saying the aim was to probe the role of the sites in “supporting the enemy’s military and intelligence activities”, framing these commercial cloud hubs as legitimate wartime infrastructure. 

This is not a surprise.

Reports have already confirmed that the Trump administration is using Anthropic’s Claude to help plan its offensive, while Palantir CEO Alex Karp has said that his firm’s products are giving the US an “edge” over its targets.

The strikes on data centres in the Middle East have also disrupted the lives of civilians. 

Millions of people across Dubai and Abu Dhabi were reportedly unable to pay for taxis, order food or access mobile banking as outages rippled through payments apps, ride-hailing platforms and major banks that rely on AWS in the Middle East.

“Data centres are a critical building block of AI capabilities at the national level,” says Vincent Boulanin, Director of the Governance of AI Programme at the Stockholm International Peace Research Institute.​

Energy, war and AI collide

The unfolding conflict in the Middle East – which has now affected multiple countries across the Gulf – has come at a time when the region has been looking to reposition itself as a global AI and data hub.

Digital tool Data Center Map says that there are currently 325 data centres in the Middle East.

In 2024, the Gulf Cooperation Council’s data centre market was valued at US$3.5bn and has been forecasted to almost triple that (US$9.5bn) by 2030.

That forecast was made under the assumption that electricity prices in the region would remain around US$0.05 per kWh, which is well below many Western markets.

This cost base, underpinned by hydrocarbon revenues, has been central to plans for vast AI campuses in the UAE and Saudi Arabia, including a proposed 5GW complex outside Abu Dhabi, which has been billed as one of the largest AI facilities in the world.​

The Iran-US-Israel war, however, has imbued those plans with a great deal of uncertainty.

The conflict has already choked traffic through the Strait of Hormuz and damaged regional energy infrastructure, forcing producers to halt shipments and threatening 20% of global crude oil and gas supplies.

Meanwhile, the price of Brent crude has spiked in line with fears of prolonged disruption, which has eroded the previously safe assumption that stable, cheap energy would underwrite AI and cloud investments across the Gulf for years to come.

Data centres under threat

While the security of data centres is always a priority, this destructive conflict has taken concerns to another level.

Until now, operators and policymakers have largely focused on physical perimeter security and cyber attacks, not state-level drones and missiles aimed at the concrete shells that house AI workloads.​

“Most data centres have ‘robust’ protection on the ground, but few had considered the threat of state-level air strikes before these attacks,” says James Shires, Co-Director of UK think tank Virtual Routes.​

AWS facilities typically deploy guards, fencing, cameras and intrusion monitoring, along with fire suppression systems and backup connectivity and group facilities into “availability zones” designed to keep services running if a single site fails.​

Those zones helped limit the fallout by allowing workloads to be shifted to other sites in the same region, but they cannot fully cushion the impact when multiple facilities are simultaneously disabled.

James argues that the emerging threat profile raises an uncomfortable question for governments.

“If we’re going to have large scale data centres built out in the Middle East, we’re going to have to get pretty serious about how we protect them,” he explains.​

The plans to defend digital infrastructure

One option, James suggests, would be to classify major data centres as critical infrastructure and extend dome-style missile defence systems to cover them, mirroring Israel’s Iron Dome approach to shielding the country’s key assets.​

The US is currently exploring the possibility of establishing its own national shield, dubbed the “Golden Dome” by President Trump, intended to intercept drones and advanced missiles, although no major contracts have yet been awarded.​

Sean Gorman,  CEO of Zephr.xyz and a contractor to the US Air Force, suggests that Tehran’s planners likely saw an opportunity to adapt tactics tested in Ukraine, where attacks on energy and digital infrastructure were used to pressure adversaries.

“UAE and Bahrain have both been positioning themselves as global AI hubs by investing heavily in datacentres and fibre infrastructure,” Sean says.

“If they can disrupt that infrastructure, it puts their strategic position under risk while also disrupting operations that are important to the economy.”

He warned that beyond drones the Gulf also faces cyber operations and sabotage risks to the dense cluster of subsea cables landing at Fujairah on the UAE’s east coast, a geographic chokepoint linking regional data hubs to the wider internet.​

Investment timelines under pressure

This fortnight of airstrikes comes at a sensitive moment for the UAE’s data centre market in particular.

Analyst firm Mordor Intelligence estimates there are about 35 data centres in the country.

More than 40% of these are classified as large facilities with up to 5,000 servers, many built to host workloads from major tech companies like OpenAI and Microsoft.

“Investment in data centres is designed with a very long time frame, and any event like this increases the risk of that investment,” James says.

“It really puts into jeopardy the cloud and AI strategies of the Gulf economy in a really worrying way.”​

Legal and diplomatic uncertainties add to the chill.

Under international law, civilian infrastructure is protected unless it directly supports military operations, but Vincent says that “it’s very likely in this case that it was a pure civilian infrastructure and therefore that it was unlawful to target that centre”.​

For now, the war has shattered the illusion that AI infrastructure in the Gulf sits above the fray, with the conflict exposing just how closely the region’s data centre boom is tied to energy security and geopolitics.