How War Puts Middle East Digital Infrastructure at Risk

The coordinated drone attacks that struck three AWS data centres across the United Arab Emirates and Bahrain this month have dealt a significant blow to the region’s high-speed digital transformation drive.

Since the strikes began on 28 February, Amazon has confirmed that two of its hyperscale facilities in the UAE suffered direct hits, while a third in Bahrain sustained heavy collateral damage from a nearby explosion.

The incidents have cut power to multiple availability zones, sparking fires and water-related outages that engineers say will take “prolonged” recovery work to resolve.

Iran’s Islamic Revolutionary Guard Corps has claimed responsibility, framing the attacks as a response to “enemy military and intelligence activity” and explicitly targeting what it described as dual-use technology infrastructure.

In a single move, the IRGC effectively reclassified commercial cloud architecture as a strategic battlefield asset.

The backdrop makes this escalation less unexpected.

Reports indicate that the Trump administration has turned to Anthropic’s Claude to assist in operational planning, while Palantir CEO Alex Karp has publicly stated that his firm’s platforms are providing the US with a data advantage across its active theatres.

The ripple effects have been immediate and far-reaching.

Millions across Dubai and Abu Dhabi faced digital disruptions as AWS-dependent ecosystems faltered – halting mobile banking, ride-hailing and payments apps.

For a region rapidly positioning itself as a global hub for AI, fintech and smart-city infrastructure, the outages reveal the fragility of cloud dependency under geopolitical strain.

“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 – now spanning multiple Gulf states – has erupted at a moment when the region is striving to cement its role as a global nexus for AI innovation and digital infrastructure.

According to industry tracker Data Center Map, there are currently 325 operational data centres across the Middle East, marking a dramatic rise in hyperscale and edge deployments over the past five years.

In 2024, the Gulf Cooperation Council’s data centre market was valued at around US$3.5bn and was projected to nearly triple to US$9.5bn by 2030, underscoring the region’s accelerating demand for computing capacity and cloud services.

That growth trajectory, however, was modeled on the assumption that regional electricity costs would stay near US$0.05 per kWh – a rate that has long given Gulf operators a competitive edge over Western counterparts.

With rising geopolitical pressure now threatening both energy stability and investor confidence, that assumption suddenly looks far less certain.

This competitive cost base – sustained by hydrocarbon-driven revenues – has been pivotal to ambitious plans for next-generation AI campuses in the UAE and Saudi Arabia.

Among them is a proposed 5GW hub outside Abu Dhabi, touted as one of the world’s largest dedicated AI complexes and a cornerstone of the Gulf’s bid to lead in sovereign compute capacity.

The Iran-US-Israel war, however, has cast a long shadow over those ambitions.

The escalating conflict has disrupted shipping lanes through the Strait of Hormuz and damaged critical energy assets across the region, forcing producers to suspend exports and jeopardising around 20% of global crude oil and gas flows.

As Brent crude prices surge amid fears of extended instability, the assumption that cheap, reliable energy would continue to anchor Gulf AI and cloud expansion is rapidly weakening.

For hyperscale operators and national AI programmes alike, the prospect of sustained energy volatility adds a new layer of risk to the region’s digital growth story.

Data centres under threat

While data centre security has always ranked high on the agenda, the current wave of conflict has elevated those concerns to an entirely new plane.

Until now, operators and regulators have primarily concentrated on physical perimeter defences and cyber attacks — not on the threat of state-sponsored drones and missile strikes targeting the very buildings that power national AI infrastructure.

“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 data centres are typically secured through a layered defence model – combining guards, fencing, cameras and intrusion‑detection systems with advanced fire suppression, redundant connectivity and backup power.

These facilities are grouped into “availability zones”, designed to ensure continuity even if one site goes offline.

In this case, those zones mitigated some of the disruption by enabling workloads to shift across the region.

Yet the architecture offers only partial protection when multiple sites are hit at once, revealing the limits of geographic redundancy in the face of coordinated physical attacks.

James argues that this evolving threat landscape forces governments to confront an uncomfortable question about the role – and vulnerability – of critical digital infrastructure in modern conflict.

“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 solution, James suggests, could be to designate large‑scale data centres as critical national infrastructure – extending dome‑style defence systems to protect them, similar to Israel’s Iron Dome, which safeguards the country’s strategic assets.

In the US, policymakers are already weighing a comparable concept.

The proposed “Golden Dome”, championed by President Trump, aims to create a national shield capable of intercepting drones and advanced missiles before they reach sensitive sites such as data centres and AI research campuses.

However, despite the rhetoric, no major contracts have yet been awarded, leaving the initiative more speculative than operational.

Sean Gorman, CEO of Zephr.xyz and a contractor to the US Air Force, believes Tehran’s military strategists likely seized an opportunity to replicate tactics refined in Ukraine, where strikes on energy and digital infrastructure were used as leverage to disrupt command, communications and civilian services alike.

“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 cautioned that the threat extends well beyond drones, pointing to mounting risks of cyber operations and physical sabotage targeting the dense web of subsea cables converging at Fujairah on the UAE’s east coast.

This is a critical chokepoint that connects the Gulf’s fast‑growing data centre ecosystem to global internet backbones.

Investment timelines under pressure

The recent two‑week barrage of airstrikes has landed at a particularly delicate moment for the UAE’s fast‑expanding data centre sector.

According to analyst firm Mordor Intelligence, the country hosts roughly 35 operational data centres, forming one of the region’s densest clusters of digital infrastructure.

More than 40% of these are large‑scale facilities housing up to 5,000 servers – many purpose‑built to support enterprise‑grade AI and cloud workloads from major players such as 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 ambiguities are compounding the unease.

Under international law, civilian infrastructure is protected unless it is directly engaged in military activity – yet Vincent argues 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 conflict has dispelled any illusion that the Gulf’s AI and data centre networks exist apart from geopolitics.

The strikes have laid bare how deeply the region’s digital transformation – from hyperscale computing to AI model training – is intertwined with energy security and strategic power.