Drone strikes on data centers spook Big Tech, halting Middle East projects
Geopolitical conflict in the Middle East is disrupting major data center infrastructure investments, with direct attacks on facilities operated by AWS, Oracle, and other tech giants causing operational disruptions and forcing companies to pause or reconsider billion-dollar expansion plans in the region. Amazon alone absorbed an estimated $150 million in costs from service waivers and infrastructure damage, while data center operators face uninsurable war risks that threaten the viability of the trillion-dollar global AI and cloud infrastructure buildout strategy. Tech leaders must now reassess their regional infrastructure strategies, potentially shifting from large consolidated campuses to distributed smaller facilities or implementing costly air-defense security measures.
A data center developer has paused all Middle East project investments after one of its facilities was damaged by an Iranian missile or drone attack. The decision comes as the Iran war is forcing Silicon Valley investors and tech companies to rethink a trillion-dollar plan to build more AI and cloud data centers in Gulf countries. The damaged data center is owned by Pure Data Centre Group, a London-based company that is operating or developing more than 1 gigawatt of data center capacity across Europe, the Middle East, and Asia. “No one’s going to run into a burning building, so to speak,” Pure DC CEO Gary Wojtaszek told CNBC. “No one’s going to put in new additional capital at scale to do anything until everything settles down." Data center developers are already eating the costs of uninsurable war damage from the conflict, which began with a US-Israeli attack on Iran on February 28. Iran primarily responded by attacking shipping to shut down the Strait of Hormuz trade corridor along with striking US military bases and energy infrastructure across the Gulf region.Read full article Comments
