Emerging risks in the digital infrastructure push

Saudi Arabia and the GCC are building ambitious AI infrastructure. Gigawatt-scale data centers, sovereign cloud platforms and national AI strategies are reshaping the region’s economic identity.

Yet the data powering this ambition — every transaction, model query and connected service — still moves through physical systems that have largely sat outside geopolitical risk planning.

In the wake of US-Israel strikes on Iran, retaliatory drone and missile attacks damaged multiple AWS data centers in the UAE and Bahrain. The incident exposed a vulnerability cloud architecture was not designed to absorb: when multiple availability zones are hit simultaneously, redundancy models built for localized failure can collapse. AWS reportedly instructed affected clients to migrate workloads out of the region.

According to TechPolicy.Press, this marked the first time a major technology company’s data centers were directly impacted by military action — a precedent that resets the risk baseline for digital infrastructure in the region.

The result has been a repricing of risk. Standard commercial property and business interruption insurance typically excludes acts of war, pushing operators toward specialized coverage. Marsh, in its 2026 political risk report, notes that political violence insurance — covering physical damage, shutdown losses and recovery costs — has shifted from optional to essential in conflict-adjacent markets. New Gulf data center projects are expected to see capital costs rise by 15-20 percent as operators absorb security premiums for hardening, anti-drone systems and redundant power.

Large sovereign investors remain committed given the push for digital sovereignty. But private capital is reassessing exposure. Brookfield Asset Management has confirmed its 20ドル billion data center partnership in Qatar will proceed, while other investors are more cautious. Enki Research, in March 2026, noted that proximity to conflict is now a structural cost factor in Gulf infrastructure.

Submarine cable systems add another layer of fragility. According to TeleGeography, roughly 99 percent of intercontinental data travels through about 600 submarine cables. While the network has proven resilient to accidents and natural disruptions, it was not designed for deliberate targeting during conflict.

In the Gulf, five major submarine cables crossing the Strait of Hormuz are tightly clustered along a narrow seabed route through Omani waters. FastNetMon warns this has become a critical concentration risk. Cable repair vessels have largely suspended operations, and Alcatel Submarine Networks declared force majeure on a regional project in March 2026, effectively halting repairs for the duration of the conflict.

The GCC is responding by diversifying routes. Saudi Arabia, Qatar and the UAE are financing overland fiber corridors through Syria, Iraq and East Africa to reduce dependence on maritime choke points, despite the political and security risks of land routes.

Yet the region remains underrepresented in global policy discussions shaping submarine cable governance. Industry bodies and major technology firms are actively influencing rules on permitting, repair access and investment protection across the US, Europe and Asia-Pacific. As the Stimson Center noted in April 2026, prolonged instability may push investors toward alternative routes that bypass the Gulf entirely. For a region positioning itself as a global AI hub, closing the gap between infrastructure investment and policy engagement is becoming increasingly urgent.

• Lina Tayara is a consultant to the digital infrastructure industry, driving business development, market research and thought leadership through her platform, Let’s Talk Tech.