Drone strikes on two AWS data centres in the UAE have triggered a reassessment of the Gulf region's AI infrastructure ambitions. Oil prices surged over 55% following the conflict, the Strait of Hormuz remains closed, and investment decisions into Middle East data centre projects are pausing or slowing. The energy cost advantage that made the Gulf attractive to hyperscalers is eroding, while new risks — physical hardening requirements, anti-drone technology, higher insurance, and supply chain disruption — are being priced in. Iran's IRGC has designated OpenAI's Stargate campus in Abu Dhabi a potential military target. Gulf sovereign investors maintain public confidence, but analysts say the illusion of long-term regional stability has been shattered. The Gulf's AI hub ambitions are not dead, but they are now more expensive, slower, and riskier.
