TL;DRDrone strikes hit AWS data centres in the UAE. Oil surged 55%. Gulf AI investment decisions are pausing as the region’s risk profile changes.
Two Amazon Web Services data centres in the UAE were targeted early in the Middle East war. Nearly three months later, oil prices remain around $100 a barrel and the Strait of Hormuz remains closed. The Gulf’s ambition to become a global AI hub is facing its first real stress test.
Before the conflict began in February, the UAE, Saudi Arabia, and Qatar were racing to position themselves at the centre of the AI boom. Abundant, low-cost energy, strategic geography, and sovereign wealth backing made the region an attractive destination for hyperscalers building data centre networks. That proposition has changed.
Investment decisions into some data centre projects have been paused or are taking longer. Pure Data Center Group CEO Gary Wojtaszek told CNBC the company had temporarily paused investment decisions in the Middle East. Mark Richards, partner at law firm BCLP, said decisions “are taking longer because of the nature of the risks associated with effectively being in a region that has some serious threats.”
The 💜 of EU techThe latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!Risks that were not part of the original investment thesis are now being priced into the process. The Atlantic Council’s Trisha Ray put it bluntly: “The ongoing conflict in the Middle East is putting AI infrastructure on the literal front lines in ways that even a year ago would have seemed out of the realm of possibility.”
