When missiles and drones launched by Iran’s Islamic Revolutionary Guard Corps (IRGC) hit cloud computing facilities operated by Amazon Web Services (AWS) and Oracle in the UAE and Bahrain on the first day of March, not only did it breach the localized air defense systems but dealt a blow to these Gulf countries AI infrastructure, effectively targeting their AI ambitions, not just their physical foundation.
Technology companies, investors, and policy experts in Washington and the Gulf countries said infrastructure projects in the UAE, Saudi Arabia, and Qatar are advancing through US and Israeli partnerships, despite Middle Eastern security threats and energy market volatility that’s affecting data centers.
Targeting gigawatt-scale data centers that represent billions of dollars in sovereign investments, the strikes proved that even Big Tech companies cannot hide from the local wars anymore. Wars that they are actively playing a fundamental role in, in support of Israel and US plans in the region.
For Gulf countries, instead of backing down, the strikes set an even more urgent race among Gulf Cooperation Council (GCC) governments to further cement their collabs with Silicon Valley companies to harden, decentralize, and militarize the physical infrastructure of their digital economies.
Gulf AI investment news is now also taking center stage of the region’s AI development. GCC governments and US-based companies argue that long-term economic strategy and digital transformation goals are outweighing the current short-term instability, keeping major projects on track.
Instead of prompting an exit plan by Silicon Valley’s cloud providers, on the ground, the attacks accelerated plans to toughen up current sites and build new ones with tighter security protocols.
This just goes to show how much Big Tech and cloud companies, such as AWS, Oracle, Google Cloud, and Microsoft Azure have become more enmeshed in the GCC government’s digital economy calculations.
AI Companies Should Be Wary of Gulf Spending Spree
The Gulf countries AI push to become a global hub is continuing despite rising conflict in the Middle East, according to technology policy experts and company executives who say long-term plans remain in place even as risks grow around infrastructure and energy security.
In Washington, a panel hosted by the Middle East Institute said that tensions with Iran will not derail national AI strategies in the AI data centers in the gulf. Mohammed Soliman, a senior fellow at the institute, said fundamentals have not changed for countries like the UAE.
Companies including Amazon, Microsoft, OpenAI, and Google continue to pursue regional projects tied to large-scale data centers and cloud systems.
At the center of this Gulf countries AI expansion is a wave of major infrastructure projects.
The UAE’s Stargate AI campus, built with partners including OpenAI, Oracle, and Nvidia, is part of a wider plan for massive computing capacity. Saudi Arabia’s AI initiative under its Vision 2030 strategy is also investing heavily in data and cloud systems, while Qatar is building its own national AI company structure supported by sovereign funds.
Early in the conflict, AI data centers in the Gulf linked to Amazon were targeted, raising concern that digital infrastructure is becoming part of regional conflict dynamics. Analysts say investment decisions are slowing, with some projects paused or delayed.
The Atlantic Council’s Geotech Center, Trisha Ray, said the situation marks a turning point in AI and critical regionalism. The conflict, she said, is placing AI systems “on the literal front lines” and changing how companies think about risk, moving from cyber threats to physical attacks on infrastructure.
Oil price volatility and disruptions linked to the Strait of Hormuz have pushed operating costs, while electricity prices in parts of the Gulf are no longer guaranteed to remain low for large industrial users such as data centers.
A partner at law firm Bryan Cave Leighton Paisne (BCLP), Mark Richards, said investment timelines are now longer because “risks associated with effectively being in a region that has some serious threats” are being priced into decisions.
Silicon Valley, GCC Choosing Sides
Despite instability, Gulf countries AI states are deepening technology ties with US companies and Israel, building what analysts describe as an emerging AI infrastructure alliance anchored in American chips, cloud systems, and software platforms.
In Abu Dhabi, the AI company G42 is building one of the largest data center clusters outside the US, while in Saudi Arabia, Humain is constructing a national AI system built on similar US technologies.
A broader strategic framework for the Gulf countries AI is also being shaped day by day.
AI data centers in the gulf, once viewed as neutral infrastructure, are now treated as strategic assets. Attacks during the conflict have pushed governments and companies to consider stronger physical protection, including hardened facilities and potentially underground sites.
Mohammed Soliman said the pressure could accelerate innovation in resilience, pointing to Ukraine, where infrastructure was expanded despite ongoing attacks, as an example of how militarization of AI can reshape technology planning without stopping it.
Within this environment, Israel’s role is expanding alongside Gulf AI development. Israeli capabilities in cybersecurity, AI systems and drone technologies are increasingly linked to Gulf funding and deployment capacity.
The UAE dollar for dollar AI infrastructure and Israel have already built cooperation frameworks in cyber intelligence and defense technology, alongside joint discussions on AI systems and digital government tools.
These partnerships could accelerate regional innovation, strengthen technological capabilities, and create new opportunities for cross-border digital collaboration.
UAE backed investment funds have flowed into Israeli technology sectors, while joint AI and critical regionalism initiatives have focused on cyber defense, cloud computing, and smart infrastructure.
At the same time, investors acknowledge that the region is entering a more complex phase. Higher insurance costs, supply chain risks, and security requirements are expected to increase the cost of building and operating Gulf countries AI and their systems.
New projects are still being considered in the UAE AI infrastructure and Saudi Arabia by data center developers and technology companies. The national policies have moved from oil to digitalization and economic diversification.
With increased geopolitical tensions and the current path is towards further AI integration in the Gulf AI development, no longer just driven by US tech but highly by regional economic aspirations and security interests.
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