Amazon Web Services (AWS) said on the 2nd (local time) that three data centers in the Middle East were damaged in drone attacks.
Reuters also said this is the first time military operations have disrupted data center operations at major U.S. big tech companies. The damage heightened concerns that the effects of the conflict could spill over into digital infrastructure.
According to Reuters and Bloomberg, AWS said two facilities in the United Arab Emirates (UAE) were directly hit, and in Bahrain, a drone attack occurred near one facility, damaging infrastructure. With direct strikes and near strikes occurring simultaneously at two sites in the UAE and one in Bahrain, power and equipment damage overlapped.
AWS said, "The attacks caused structural damage and cut power supply to the infrastructure, and there was additional flooding during some firefighting efforts." It added that, given the nature of the physical damage, restoration work is expected to take time and that it is working to fully restore service as quickly as possible.
A source who requested anonymity told Reuters that financial institutions using AWS services were affected. Bloomberg noted that the damage shows the impact of the widening conflict across the Middle East is spreading beyond energy and military facilities to data centers.
Iran, which lost its supreme leader in U.S. and Israeli airstrikes on the 28th, launched retaliatory attacks with drones and missiles targeting U.S. military bases in the Middle East. Foreign ministers of Gulf states, including the UAE, Qatar and Bahrain, held an emergency meeting on the 1st of this month, strongly condemned Iran and warned they could take military action.
Reuters said that because U.S. big tech companies have particularly positioned the UAE as a regional hub for artificial intelligence (AI) computing, this incident could raise questions about the pace of expansion in the area. Meanwhile, Microsoft (MS) released in November last year that it plans to increase its investment in the UAE to $15 billion by the end of 2029. The industry also sees the potential prolonging of the conflict as an emerging variable for the Middle East AI investment landscape.
The Center for Strategic and International Studies (CSIS), a U.S. think tank, analyzed last week that, just as Iran and its proxies previously targeted pipelines, refineries and oil fields, in the "compute era," data centers and the energy infrastructure that supports them could also become targets. Because data centers operate on the premise of large-scale power, they could be targeted along with the energy infrastructure that supports them. There are also views that big tech's investment plans to grow the Middle East into an "AI computing hub" could be reassessed as they intersect with security risks.