US Media: Trillions of Dollars in AI Investment in the Gulf Region Face New Risks

Source: Global

[Global Times special correspondent in the U.S. Feng Yaren, Global Times correspondent Li Xunding] As the situation in the Middle East remains tense, U.S. technology companies are being pushed to the “front line” of the conflict. On March 31, Iran’s Islamic Revolutionary Guard Corps released a latest announcement, saying it will designate as targets companies and institutions related to 18 U.S. information and communications technology and artificial intelligence enterprises in the Middle East region, including Hewlett-Packard, Apple, Google, and others. And this is not the first time technology firms in the region have been targeted by attacks. The New York Times reported that this confrontation adds new risks to the tens of billions of dollars in investments that tech companies have in the Gulf region.

In response to the latest threats issued by Iran, Microsoft, Google, and others declined to comment. An Intel spokesperson said in a statement: “The safety and well-being of our team are our top priorities. The company is taking steps to protect and support employees and facilities in the Middle East region, and is closely monitoring developments.”

U.S. newsweekly Time, in an article published on the 1st, said that all these companies carry out business in Israel or have commercial ties with Israel, even though most of the companies have denied allegations that their technology has been used by Israel for military purposes. This also explains why the above companies have become Iran’s main attack targets.

In fact, Iran has already previously carried out attacks on the digital infrastructure of certain U.S. technology companies in Gulf countries. In early March, Iran’s Islamic Revolutionary Guard Corps carried out a drone attack on two U.S. Amazon Web Services (AWS) data centers located in the United Arab Emirates, and a data center in Bahrain was affected by the blast. Widespread outages occurred in enterprise services that rely on AWS across multiple locations in the Middle East. Subsequently, the Claude large language model, which relies on AWS, experienced a global web-end and console outage.

James Henderson, CEO of technology risk management firm Healix, believes that such threats targeting technology companies are not sporadic incidents, but rather a trend that is taking shape. “Technology assets are now seen as part of the conflict, rather than existing on the margins,” he said. “In future crises, it is very likely that they will directly target data centers and cloud platforms, just like attacks on traditional strategic targets.”

“Big tech companies in the Gulf face an uncertain future.” The New York Times said that as tensions in the Middle East continue to escalate, the conflict adds new risks to the tens of billions of dollars in investments that tech companies plan to make in the region. An Axios website report dated the 1st said that in the AI era, data centers are prone to becoming targets of attacks in wartime. Bloomberg geopolitical economist Michael Dunn said: “The decision back then for big tech companies to place their bets on the Gulf region, trying to turn it into a major AI hub outside the United States, does not seem like a wise choice.”

Luxembourg market intelligence platform “IndexBox,” in an article on the 1st citing analysts, said that if the conflict lasts for a long time, it may force all parties to reassess their plans for locating data centers in Gulf countries, because if key infrastructure such as energy and water supply systems faces risks, it will directly affect the operation of data centers. And what will affect future development of Gulf data centers is not only physical damage caused by the conflict. A report by the British newspaper The Times said that global tech companies rely on Middle East funding, and one of the unexpected economic harms brought by this conflict may be the generous investment originating from the Gulf region.

Zhang Zhipeng, a researcher in the AI program at the World Think Tank Research Center of Shanghai International Studies University, told reporters from the Global Times that in the long term, the underlying logic for multinational companies to build digital infrastructure in the Gulf region will undergo profound changes. On the one hand, Middle Eastern countries seeking economic and technological transformation in the “post-oil era” will inevitably re-evaluate the selection criteria for technology suppliers and cooperation models, bring in third-party countries’ technology that is not associated with geopolitical conflict, and build a diversified technology ecosystem. On the other hand, the siting, construction, and operation of data centers will also move toward higher security standards such as underground bunkerization, resistance to electromagnetic interference, and resistance to kinetic attacks.

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