How Conflict Is Threatening the Gulf’s Cloud Infrastructure

The drone strikes that damaged three Amazon Web Services data centres in the United Arab Emirates and Bahrain this month, could signal a fundamental shift in how the technology sector thinks about infrastructure security.

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, since the airstrikes began on 28 February.

The strikes have disrupted power flow to the facilities and triggered fires and water damage.

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 commercial cloud hubs as legitimate wartime infrastructure.

Meanwhile, 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.

The scale of disruption has highlighted the concentration risk inherent in cloud infrastructure. Major financial institutions, government services and consumer platforms across the region depend on a relatively small number of facilities, creating single points of failure that can cascade across entire economies when compromised.

Regional tech ambitions face uncertainty

The conflict has come at a time when the region has been looking to reposition itself as a global AI and data hub. According to Data Center Map, 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 to US$9.5bn by 2030.

The forecast assumed electricity prices would remain around US$0.05 per kWh, well below many Western markets. This cost base has been central to plans for vast AI campuses in the UAE and Saudi Arabia, including a proposed 5 GW complex outside Abu Dhabi, billed as one of the largest AI facilities in the world.

The Iran-US-Israel war has imbued those plans with uncertainty. The conflict has already choked traffic through the Strait of Hormuz and damaged regional energy infrastructure, threatening 20% of global crude oil and gas supplies.

Meanwhile, the price of Brent crude has spiked, eroding the assumption that stable, cheap energy would underwrite AI and cloud investments across the Gulf.

International investors are now reassessing the risk profile of Middle Eastern data centre projects. Several planned expansions have been placed under review as companies weigh the security implications against the region's competitive advantages in energy costs and connectivity to Asian and European markets.

Physical security becomes critical concern

For years, operators and policymakers have largely focused on physical perimeter security and cyber attacks, not state-level drones and missiles.

"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.

They group facilities into "availability zones" designed to keep services running if a single site fails. Those zones helped limit the fallout, but they cannot fully cushion the impact when multiple facilities are simultaneously disabled.

James argues 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.

One option would be to classify major data centres as critical infrastructure and extend dome-style missile defence systems to cover them.

The cost of such protection would be substantial. Military-grade air defence systems require significant capital investment, ongoing maintenance and trained personnel.

These expenses could fundamentally alter the economic calculus that has made the Gulf an attractive location for hyperscale data centre development.

Strategic vulnerabilities expose new risks

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 whilst 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.​

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

The conflict has exposed just how closely the region's data centre boom is tied to energy security and geopolitics.

The attacks may also prompt a broader rethinking of data sovereignty and geographic distribution strategies.

Companies that previously concentrated operations in the Gulf to optimise costs and latency may now prioritise resilience through geographic diversification, potentially reversing years of regional investment momentum.