For Middle East AI infrastructure, war is a risk factor

AI infrastructure spending in the Middle East has garnered billions in investment, but the war with Iran highlights one of the biggest risk factors in the region.

Technology giants often list risk factors for data centers and typically cite everything from grid stability to natural disasters and cyberattacks. In the Middle East, war can be added to the list.

What remains to be seen is whether AI infrastructure investment will be curtailed. Here's a look at the AI infrastructure plans underway with Saudi Arabia, UAE and Qatar leading the charge with sovereign AI efforts. The appeal of the Middle East for data centers is ample power.

Middle East AI efforts include:

• Saudi Arabia's Project Transcendence, which was a $100 billion state-backed initiative by the Public Investment Fund to turn the Kingdom into an AI powerhouse. The investment covers AI infrastructure, data centers and Arabic language models. HUMAIN and Google are key partners.
• UAE's Khazna 100MW AI-Optimized Data Center. Announced in October 2024, the data center is the largest AI facility in the region.
• Microsoft and Oracle invest. Microsoft invested $80 billion in Saudi Arabia AI infrastructure and Oracle followed with a $14 billion investment over 10 years.

There are multiple AI infrastructure buildouts in progress in the Middle East beyond those headliners.

The problem? Geopolitics. AI facilities in the Middle East are operating in a volatile region.

AWS has multiple services down in the United Arab Emirates after data centers are without power due to the war in the Middle East. AWS said the facilities in UAE are running on backup power. EC2, Amazon DynamoDB, Amazon S3 and dozens of other services are struggling. In its latest update, AWS said:

"We are actively working to restore power and connectivity, after which we will begin recovery of affected resources; full recovery is still expected to be many hours away. We recommend that affected customers failover, and backup any critical data, to another AWS Region."

So far, Microsoft Azure and Google Cloud Middle East regions haven’t been affected.