The News
Iranian drone strikes on Amazon data centers in Bahrain and the UAE set a new precedent for calculating the risk of storing information and computing power in the Gulf.
But rather than abandoning the region, investors and analysts are predicting a more nuanced near-term reality: Europe stands to gain, as businesses store data across more locations, but the UAE — the Middle East’s AI leader — will continue to be active, even if it has to look beyond its own backyard for data center sites.
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The Gulf’s biggest AI enterprise, G42, has long sought an international footprint. The Abu Dhabi firm has operations in roughly 30 countries, with subsidiaries in the UK and India, as well as data center development plans in places like France, Italy, and Kazakhstan. G42 has also built up four times the computing capacity in the US compared to the UAE, Semafor has previously reported.
“We’re seeing even more action than we expected,” one private equity fund manager told Semafor about investor interest in European data centers amid the war in Iran.
European stocks linked to the AI boom have been performing well in 2026 but will be further “recalculated” for value if the conflict persists, the investor predicted. Solaria Energia, a Spanish renewable energy company that is connecting data centers to its own clean grid, for example, is nearing all-time trading highs.
Amazon’s stock has rallied since the attacks on its Gulf assets, with analysts suggesting enterprises will stop relying on a single location for data deployment and that, in turn, will drive up cloud revenues as companies are forced to pay for more storage, according to TechPolicy Press.
Step Back
Of the 233 data centers in the Gulf, only a handful have been affected by the conflict so far, and major workloads have been successfully rerouted, according to research firm DC Byte.
Disruptions around the Strait of Hormuz will lead to increased costs, potentially impacting the 2 gigawatts of data center capacity currently under development in the near term. The conflict has “underscored the interaction between geopolitical risk and digital infrastructure,” but so far has not revealed systemic weaknesses in the region’s data center ecosystem, according to DC Byte CEO Bernard Johnson.
Notable
- With security risks up above, what about digging down below? Building new data centers underground costs more than $2,000 per square foot in the US, Semafor’s Rachyl Jones reported.