Two Amazon Web Services (AWS) data centres in the UAE were targeted by drone strikes in the early stages of the Middle East conflict. Nearly three months later, with oil prices hovering around $100 a barrel and the Strait of Hormuz remaining closed, the Gulf’s ambition to become a global AI hub is facing its first real stress test. The region's risk profile has fundamentally shifted, impacting long-term infrastructure planning.
Before the conflict began, the UAE, Saudi Arabia, and Qatar were racing to position themselves at the heart of the AI boom. Abundant, low-cost energy and sovereign wealth backing made the region an attractive destination for hyperscalers. That proposition has changed. Gary Wojtaszek, CEO of Pure Data Center Group, confirmed that the company has temporarily paused investment decisions in the Middle East. Legal experts at BCLP note that decisions are taking longer as investors grapple with serious regional threats that were previously unforeseen.
The energy economics of the region have also been disrupted. Gulf markets previously offered industrial power at around $0.11 per kWh, compared to $0.25 to $0.40 in parts of Europe. However, the war has destabilized global energy markets, with Brent crude surging over 55% at its peak. In energy-rich states, cheap power is no longer guaranteed for large industrial users like data centres, as the effective closure of the Strait of Hormuz marks one of the largest supply disruptions in history.
The drone strikes on AWS facilities signify that data centres are now as strategically critical as oil pipelines. Experts suggest future facilities may need to be physically hardened, built underground, or diversified geographically. The threat was highlighted when Iran’s Revolutionary Guard released satellite footage of OpenAI’s Stargate campus in Abu Dhabi, designating it a potential target. Despite these challenges, regional giants like G42 and Saudi Arabia's HUMAIN maintain that their conviction remains deep, viewing their massive scale as a continued strategic advantage.
