The continued escalation of the situation in Iran has complicated the Gulf countries' more than 300 billion US dollars in data center, chip and other artificial intelligence investment plans, which may also further reduce potential funding sources for technology companies with strong demand for computing power. Countries such as the United Arab Emirates and Saudi Arabia have become popular locations for data centers. Local companies are jointly promoting related projects with American companies such as xAI, OpenAI, Microsoft, Amazon, Oracle, and Google. The region has become a key location for these companies due to its cheap energy advantages.
However, drone attacks on three local Amazon data centers suddenly made the risks of these projects significantly higher. If the conflict becomes protracted, it may further reduce overseas investment in the region by companies such as Brookfield, which are cooperating with several Gulf countries to promote artificial intelligence investment.
OpenAI and xAI have received financing from Gulf countries and plan to build data centers there. Compared with rival Anthropic (which has raised funds in the Gulf but is unwilling to build large computing facilities), these two companies face higher risks in this conflict.
Analysts covering the region say Gulf states will not immediately cut back on AI investments due to the conflict due to their economic and strategic importance. But if the conflict drags on for too long, they may have no choice.
"If the conflict lasts for several months or even longer, some investments may indeed be forced to interrupt." Stephen Minton, an analyst at technology research institute IDC, said, however, he expects artificial intelligence spending in the Gulf region to continue to grow in the short term.
In addition to the technology giants themselves, the Gulf countries are already among the largest investors in artificial intelligence. The spending plans of Kuwait, Qatar, Saudi Arabia and the United Arab Emirates cover data center land and electricity, local language artificial intelligence model development and other fields. The most expensive of them is Nvidia GPU - affected by the US government's national security considerations, these countries are fully importing this chip.
According to current market conditions, Saudi Crown Prince Mohammed bin Salman recently stated that the country plans to invest US$50 billion in the semiconductor field in the short term; the UAE may spend more than US$30 billion to purchase its quota of Nvidia chips by next year. If the local area cannot continue to provide funding and security for data centers, these chips will not be able to function.
Amazon's latest service update on Tuesday showed that after three of its data centers in the Gulf were attacked, a number of local Amazon cloud technology services have been affected.
The United Arab Emirates, where two of the facilities were attacked, is working on the largest project in the region: a 10-square-mile data center campus that will consume up to 5 gigawatts of energy. As part of the Stargate project, OpenAI and Oracle will operate 1 gigawatt of chip capacity at the park.
Saudi officials plan to build data centers with a total energy consumption of 6.6 gigawatts by 2034. Elon Musk's xAI is working with Humain, who is responsible for related planning, to build a local data center with an energy consumption of up to 500 megawatts (before the artificial intelligence boom, data center energy consumption was usually 10 to 50 megawatts; the construction cost of a 1 gigawatt data center is about US$50 to 60 billion).
Amazon, Google, Microsoft and Oracle have also launched or announced the construction of data centers in Saudi Arabia. Iran has previously launched missiles at Saudi Arabia.
Humain CEO Tariq Amin said in a statement on Thursday that the company has acquired 211 plots of land for Saudi data center planning and emphasized that it is doing its best to avoid service interruptions. “Our strategy is based on geographical diversity and multiple fiber routes, which is achieved thanks to the Kingdom’s vast size.”
Kuwait and Qatar have not announced large-scale spending commitments similar to their neighbors, but they are working with asset managers such as BlackRock and Brookfield to promote the construction of artificial intelligence data centers. Brookfield and Qatar's sovereign wealth fund said in December last year that they planned to jointly invest $20 billion in domestic and foreign artificial intelligence projects.
Jesse Marks, CEO of geopolitical consultancy Rihla Research and Advisory, said the conflict may prompt countries to re-plan data center locations. “The Gulf region will eventually face a time to reassess the way it builds core infrastructure, even its geography.”
Brookfield Asset Management Chief Executive Connor Teske said last week that the conflict had not affected the company's investment plans in Qatar. "We are long-term investors," he said.
Even as Gulf states continue to invest in local artificial intelligence projects, they may scale back their trillion-dollar commitments to U.S. manufacturing facilities and other large investments. Saudi Arabia's sovereign wealth fund is providing the bulk of the financing for a $55 billion acquisition of Electronic Arts, which is scheduled to be finalized in the coming months.
The macro impact of this conflict may also affect the field of artificial intelligence financing. Prolonged conflicts will impact tourism, trade and investment, and drag down global economic growth. Rising energy prices (oil prices have risen by nearly 30%) may trigger inflation and push up interest rates, thereby increasing data center construction costs. U.S. interest rates rose last week by the most since President Donald Trump imposed "Liberation Day" tariffs in April 2019.