DUBAI—The day after the U.S. and Israel launched their opening strikes on Iran, the Islamic Republic shot back with swarms of drones aimed at the Gulf’s newest high-value targets: American data centers.
In a May 2025 visit to Abu Dhabi, President Trump watched as the Emirates’ leaders unveiled plans for a data-center complex requiring 5 gigawatts of power, the equivalent of more than two Hoover Dams. Emirati and U.S. officials boasted that OpenAI had agreed to be the inaugural tenant at the complex, with plans to ultimately take 20% of its capacity. OpenAI still hasn’t signed a lease for the project, people familiar with the matter said.
“The value proposition that the Gulf states made to the U.S. government and U.S. tech companies was that they will provide abundant capital, cheap energy and easy construction,” said Aaron Bartnick, a White House technology official during the Biden administration. Amazon Web Services said it is working to restore services to its Bahrain and U.A.E. facilities and that it has provided billing relief for customers who relied on them. The attacks and lasting damage are complicating the pitch by Gulf states like the United Arab Emirates to become world-leading data processors for industries such as artificial intelligence. They add a huge new risk for U.S. companies weighing investments that can cost tens of billions of dollars. The U.A.E. put years of diplomatic muscle into persuading U.S. officials to sell it top-of-the-line AI chips, ultimately swaying the Trump administration to give it the same access as European countries . That deal now appears to be stalled. OpenAI didn’t respond to a request for comment. News Corp, owner of The Wall Street Journal, has a content-licensing partnership with OpenAI. “The Iran war has really flipped a lot of that math on its head. The U.A.E. Foreign Ministry and the Abu Dhabi government media office didn’t respond to requests for comment.
U.A.E. Eases Data Sovereignty for Amazon Amid Infrastructure Damage
In response to recent Iranian strikes that severely impacted Amazon’s facilities in the U.A.E., the country has temporarily relaxed its stringent data-sovereignty regulations. This allows certain entities to relocate their data abroad as Amazon works to restore services disrupted by the attacks.
The strikes resulted in significant infrastructure damage, including fires and power outages, exacerbated by water used to extinguish the flames. Consequently, various banking applications, corporate services, and financial technology platforms in the region experienced outages.
Amazon is actively assisting its clients in backing up data and transferring it to locations in the U.S., Europe, and other regions. Industry insiders have indicated that the company’s efforts are ongoing as they navigate the challenges presented by the situation.
