On March 1, 2026, Iranian drones attacked Amazon Web Services (AWS) data centers in the UAE and Bahrain, with Iran characterizing these facilities as extensions of US military operations. These coordinated strikes, which included a Shahed 136 drone hitting an AWS data center in the UAE at 4:30 AM, led to devastating fires and power shutdowns. A second AWS data center in the UAE and a third in Bahrain were also targeted, forcing AWS to advise clients to consider migrating workloads out of the Middle East. The disruption impacted banking, payments, and consumer services for millions of people across a region of 50 million, highlighting the vulnerability of critical infrastructure.
These attacks directly threaten the Gulf's significant investment in becoming an AI superpower. Saudi Arabia, Qatar, and the UAE have committed approximately $2.5 trillion to US-linked technology investments, with Amazon pledging $5.3 billion to an AI hub in Riyadh and Microsoft committing $15.2 billion for Saudi projects. The region collectively aims for 8–10 gigawatts of AI compute capacity, with the UAE's Stargate UAE project targeting 5 GW. The strikes exposed major security vulnerabilities, creating reputational risks for tech firms and significantly increasing insurance premiums and supply chain complexities, thereby undermining the region's cost advantages.
The broader impact extends beyond technology infrastructure. The conflict has challenged the perception of the Gulf as a stable investment platform, which Goldman Sachs projects could shrink Kuwait's and Qatar's GDP by up to 14% each, and Saudi Arabia's and the UAE's by 3% and 5%, respectively. The closure of the Strait of Hormuz, a critical passageway for one-fifth of global oil and gas trade, following February strikes, led to an estimated loss of 6.7 million barrels per day in export capacity for Saudi Arabia, the UAE, Iraq, and Kuwait. While Brookfield Asset Management's $20 billion data center partnership with the Qatar Investment Authority is proceeding, the attacks introduce new due diligence complexities regarding war risk insurance and long-term infrastructure commitments in active conflict zones.
