The rise of artificial intelligence (AI) data centers as targets of Iranian attacks is increasing uncertainty around AI investments in the Middle East.
According to CNN on August 3, the Islamic Revolutionary Guard Corps (IRGC) of Iran has identified data centers of major U.S. tech companies, including Amazon, Google, Microsoft, and NVIDIA, as primary targets since the onset of hostilities.
Reports indicate that an Amazon data center located in Bahrain suffered significant damage from a missile attack by Iran last month. Iran cited the provision of cloud services to the U.S. military and intelligence agencies by American tech firms as a reason for the attack.
Indeed, Amazon, Google, Microsoft, and Oracle are participating in the U.S. Department of Defense's $9 billion Joint Combat Cloud Capability project. It is also reported that the U.S. military has targeted one of Iran's data centers in response.
Experts suggest that the dual-use nature of data centers for both civilian services and military intelligence has provided justification for physical attacks.
Andrew Ledy, a professor at the University of California, Berkeley, stated, "Data centers can handle both military intelligence and civilian services. From Iran's perspective, the Amazon data center is essentially no different from a U.S. military facility."
The ongoing attacks on data centers raise concerns about the impact on the AI development strategies pursued by Gulf nations. Saudi Arabia is investing a significant portion of its $1 trillion sovereign wealth fund into the AI sector, while the United Arab Emirates (UAE) is working on a $500 billion AI data center project in collaboration with the U.S.
The six Gulf Cooperation Council (GCC) countries, including Saudi Arabia and the UAE, have committed to over $2 trillion in AI-related investments with the U.S.
However, if Iran's attacks on data centers continue, there are fears that market confidence in the safety of AI infrastructure in the Middle East may weaken. Foreign companies may reconsider their plans for data center construction and investment, potentially slowing down project timelines.
The insurance industry is also reassessing the risk levels associated with AI facilities in the region. Experts predict that insurance premiums for data centers and investment risk premiums may rise, and some facilities could face challenges in obtaining insurance coverage altogether.
* This article has been translated by AI.
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