Two Amazon Data Centres in the UAE Hit by Drones: Gulf’s AI Ambitions Tested
May 24, 2026 – 4:19 pm
Image by: Kavali Chandrakanth KCK
Summary
Drone strikes hit AWS data centres in the UAE. Oil prices surged 55%. Gulf AI investment decisions are pausing due to the region’s changing risk profile.
Two Amazon Web Services (AWS) data centres in the UAE were targeted early in the Middle East conflict. Even after three months, oil prices remain high and the Strait of Hormuz remains closed. This presents a significant challenge to the Gulf’s ambition of becoming a global AI hub.
Before the war, the UAE, Saudi Arabia, and Qatar aimed to position themselves at the forefront of the AI boom, thanks to their abundant and low-cost energy, strategic location, and sovereign wealth. However, the ongoing conflict has introduced new risks into these investments.
Shift in Investment Decisions
Investment decisions into data centre projects have been paused or delayed. Gary Wojtaszek, CEO of Pure Data Center Group, told CNBC that his company had temporarily halted investment decisions in the Middle East. Mark Richards, partner at BCLP, noted that decisions are now taking longer due to increased risks associated with the region’s instability.
Shifting Energy Economics
The energy economics in the Gulf have shifted dramatically. Previously offering industrial power at around $0.11 per kWh, these markets now face disrupted global energy prices. Brent crude and UAE gas prices surged during this period. As a result, cheap power is no longer guaranteed for data centres and other large industrial users.
Drone Strikes and Strategic Importance
The drone strikes on AWS facilities marked an unprecedented escalation, highlighting the strategic importance of data centres. Trisha Ray from The Atlantic Council stated that AI infrastructure now finds itself on the "literal front lines" in ways previously unimaginable. Future facilities may need to be hardened or built underground to mitigate risks.
Regional Strategic Calculus
Iran’s Islamic Revolutionary Guard Corps released satellite footage of OpenAI’s Stargate campus in Abu Dhabi, marking it as a potential military target. This demonstrates that the Gulf’s AI infrastructure is now considered part of the region’s strategic calculus.
Despite the challenges, major Gulf AI players remain undeterred. G42, backed by Mubadala, stated their conviction has only deepened. Tareq Amin, CEO of HUMAIN, and Tara Davies from KKR echoed this sentiment, emphasizing long-term perspectives on the AI landscape.