Iran war threatens big tech bets in Middle East as UAE AWS facility goes up in flames
Escalating regional tensions in the Middle East have spilled into critical infrastructure, with Amazon Web Services (AWS) announcing that unidentified objects struck one of its data centres in the United Arab Emirates. Big tech firms have poured billions into the region, but if war lasts or expands, they might lose these investments.
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Amazon Web Services confirms a data center in the UAE was hit by objects causing fire and outages.
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The strike coincides with Iranian retaliation against US and Israeli targets across the Middle East region.
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Service disruptions affect the ME-CENTRAL-1 region with recovery expected to take multiple hours for clients.
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Rising geopolitical conflict threatens billions in recent AI infrastructure investments made by American tech big tech companies.
Officially, it’s unclear if the incident is related to the conflict between the United States, Israel, and Iran. However, the fire in the data centre broke out on the same day Iranian projectiles struck the UAE in retaliation for the airstrikes that killed Supreme Leader Ayatollah Ali Khamenei and other senior Iranian officials.
According to AWS, the incident occurred on March 1st. The fire protection services had to shut off power to the facility, which is still down a day later.
“One of our Availability Zones was impacted by objects that struck the data centre, creating sparks and fire,” AWS said in a post on its Health Dashboard, almost undoubtedly meaning a drone strike.
Later, the company said the issue has also affected another Availability Zone in “the ME-CENTRAL-1 Region.”
“At this point, it is not possible to launch new instances in the region, although existing instances should not be affected. Other AWS Services, such as DynamoDB and S3, are also experiencing significant error rates and latencies,” said AWS.
“We are actively working to restore power and connectivity, at which time we will begin to work to recover affected resources. As of this time, we expect recovery to be multiple hours away.”
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An “Availability Zone” consists of one or more interconnected physical data centers. These zones are independent, isolated geographical locations within each AWS region. AWS has three zones in the UAE.
It’s unclear whether the facility was struck deliberately, but Iran, under attack by the US and Israel since last week, has been launching retaliatory missile and drone attacks across the Middle East.
Tehran has mostly targeted US bases and allies in the region, including in the UAE, Qatar, Kuwait, and Saudi Arabia. But this particular incident in Abu Dhabi could be a sign that the conflict is spilling over from military targets to critical civilian infrastructure.
It just so happens that American big tech companies, including, of course, Amazon, have been investing heavily – by invitation – in certain Gulf states.
The two regional leaders, the UAE and Saudi Arabia, see AI as a long-term national future industry, calling computing power the new oil. They’re attracting big tech’s AI data centers and building their own AI ecosystems.
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According to market research firm IMAEC Group, the Middle East’s AI market, valued at $6.6 billion in 2025, is projected to surge to $168 billion by 2034.
Surely, though, the highly volatile geopolitical climate is bound to become a sharper headache now. Tech giants that have been rapidly expanding operations in the UAE and Saudi Arabia might need to reassess their investment plans.
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