The ongoing Iran war is causing significant delays in the rollout of subsea fiber-optic cables, which are vital for internet connectivity and the Gulf's ambitious AI plans. At least five projects in the Red Sea and Arabian Gulf, originally slated for completion between 2026 and 2027, are now at risk due to operators' inability to safely access key shipping lanes. Iranian military attacks, including those around the Strait of Hormuz, are extending disruptions and further hindering digital infrastructure development in the region. Experts suggest that even with de-escalation, these projects could face delays measured in years, not months, as companies adjust schedules, costs, and rerouting strategies.
Meta Platforms Inc. has already paused a segment of its massive 2Africa underwater cable system in the Persian Gulf due to the conflict. Alcatel Submarine Networks, responsible for laying the fiber-optic cable, has issued force majeure notices, stating it can no longer safely operate. The company's Ile de Batz installation ship is currently stranded near Dammam, Saudi Arabia. When completed, 2Africa is intended to be the world's largest fiber-optic cable system, linking Africa, Europe, and the Middle East, with its "Pearls" segment in the Persian Gulf and a Red Sea segment still unfinished.
These subsea cables are critical for Gulf countries, such as the UAE and Saudi Arabia, which are investing billions of dollars in AI and digital infrastructure to diversify their oil-dependent economies. The cables facilitate the movement of large datasets, access to global cloud infrastructure, and the delivery of AI-powered services. Delays to new subsea infrastructure could hinder expected gains in cost, latency, and route diversity, potentially slowing the scale-up of AI workloads. While internet traffic can be rerouted through terrestrial cables, this could lead to slower internet speeds in the region. Furthermore, even after the war, the presence of undetonated ordnance on the seafloor will require extensive surveying before cable installation can resume.
The Strait of Hormuz is a critical chokepoint for both oil and digital infrastructure, with numerous subsea cables carrying a large portion of internet traffic between Asia, the Middle East, and Europe. Recent threats from Iran to impose fees on internet cables and warnings about their vulnerability have exacerbated concerns. While some experts, like the International Cable Protection Committee (ICPC), note that bandwidth traversing the Strait of Hormuz accounts for less than 1% of global international bandwidth, the regional impact on internet services could be significant. Damage to cables, as seen in a past incident in the Red Sea that slowed internet services in parts of the Middle East, India, and Pakistan, highlights the region's dependence on these underwater links. Accidents and geopolitical tensions both pose risks to these vital connections.
