Data centers that power artificial intelligence have become targets in the conflict between Iran and its neighbors. Iran has aimed missiles at facilities tied to major tech companies across the Gulf region.
The United States responded by striking a data center inside Iran. This marks one of the first times physical attacks on this scale have hit data center infrastructure.
Iran has used missile strikes on oil refineries and tourist sites in the past. It has now expanded that approach to include data centers that support artificial intelligence work.
At least five data centers in the Gulf region have been hit during the conflict. One target was an Amazon facility in Bahrain, which was struck twice, including an attack late last month.
Amazon has not commented on the strikes. Its cloud service dashboard showed problems in the region after an initial attack on April 30, and satellite images showed damage to the building.
A New Kind of War Target
Iran's Revolutionary Guard published a list of 29 tech sites it planned to strike. The list included facilities owned by Amazon, Google, Microsoft, Nvidia, and Palantir.
Iran said it attacked the Amazon facility because the company provides cloud services used for US military intelligence work. Amazon holds government contracts as part of a $9 billion cloud project shared with Google, Microsoft, and Oracle.
The Gulf region has spent heavily to become a hub for artificial intelligence, alongside the United States and China. Saudi Arabia has put a large share of its trillion dollar wealth fund toward AI projects.
The United Arab Emirates signed a deal with the US last year to build a $500 billion data center project called Stargate. OpenAI, Oracle, Nvidia, and Cisco all took part in that project.
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE have pledged more than $2 trillion in AI related investments with the United States. Part of the deal required them to move away from Chinese technology.
That partnership has tied the Gulf region closely to the United States. It has also made their AI facilities a target for Iranian attacks.
Data centers have existed for decades, and militaries have long tried to disrupt communication systems through jamming and cyberattacks. Physical strikes on data centers themselves are new.
Rising Costs and Risks
Experts say data centers can serve both military and commercial purposes at the same time. That makes it hard to know whether a strike is aimed at civilian or military use.
Data centers are large buildings filled with costly equipment. There is little that can be done to protect them from bombs or drones, according to insurance experts.
Companies build data centers with backup systems in different locations. If one facility is damaged, data and computing power can often still be accessed elsewhere.
Despite the attacks, Gulf states remain committed to spending on AI projects. Some experts say companies may hesitate to build new facilities if they cannot protect them.
Insurance costs for data centers are rising fast, and some insurers are becoming less willing to offer coverage at all. Companies may not be able to shift all of the financial risk to insurers.
The cost of building data centers is already climbing due to higher prices for chips, materials, and labor. That makes the added risk from attacks harder for companies to absorb going forward.
