Drone and missile strikes hit Gulf data centers, imperil Middle East AI ambitions

Drone and missile strikes on data centers in the United Arab Emirates and Bahrain have disrupted cloud services and put at risk multi‑billion‑dollar plans to turn the Gulf into a global artificial intelligence hub, industry sources and regional reports say. Amazon reported outages in Bahrain data‑center services after the attacks; earlier strikes hit facilities in the UAE, and the fighting has already taken down several digital services, exposing the region’s limited physical defenses for critical AI infrastructure.

“is creating a future where the Middle East will be defined by trade, not by chaos.”

That was U.S. President Donald Trump’s line at a high‑profile investment forum in Riyadh last year, where he stood alongside tech leaders including Sam Altman of OpenAI and Andy Jassy of Amazon as Gulf states touted sweeping AI ambitions. Nine months on, the strikes have cast doubt on that vision.

Context and details

Gulf governments — particularly the UAE and Saudi Arabia — have been positioning AI as the centrepiece of post‑oil economic strategies, signing deals and directing billions into data centers and cloud infrastructure. According to Gartner, technology spending in the Middle East was expected to reach about $155 billion in 2025, with investments in data centers forecast to rise almost 70% year‑on‑year.

• Major tech names tied to regional projects include Amazon, OpenAI, Microsoft, Nvidia, Oracle, Google and Palantir.
• Under agreements reportedly brokered during last year’s Riyadh meetings, Amazon, Nvidia and others signed multibillion‑dollar partnerships with Saudi state AI startup Humain to build so‑called “AI factories.”
• In Abu Dhabi, a deal was announced to build what was described as the largest data‑center complex outside the United States.

Those plans are now vulnerable. Iran has warned it could target “enemy” technology infrastructure associated with companies named above, and analysts say the shift from cyber concerns to physical attack risk is acute. “If this lasts a few months, I think we’ll have to reassess almost everything,” said analyst Paul Mix, warning that protracted conflict could force companies and states to rethink site locations, redundancy and security costs.

Security consultant Ginger Machet underscored the change in threat calculus: “War leaves investments in data centers in the air. Protection of data centers up to now has largely focused on preventing cyberattacks, not on the physical damage to infrastructure by drones or missiles.” The strikes have also highlighted dependencies beyond security: large‑scale AI training and supercomputer operations require substantial power and water for cooling, creating additional vulnerabilities if supply chains or utilities come under attack.

Amazon told reporters it had experienced outages in Bahrain data‑center services following the fighting but declined to comment on the scale of the damage. Regional officials and technology partners have not publicly quantified financial losses tied to the strikes.

Outlook

For Gulf states that have staked national economic futures on AI, the immediate task will be balancing rapid deployment of data centers with hardened physical protections, diversified geographies and contingency plans for energy and water. Companies that have inked multibillion‑dollar deals — and the governments that courted them — now face hard choices about how much to invest in a region where the risk of kinetic strikes on critical infrastructure has moved from theoretical to realised. If the conflict continues, analysts say the pace and location of AI investments in the Middle East could change markedly.