Silicon Valley’s Bad Bet on the Gulf

https://www.foreignaffairs.com/persian-gulf/silicon-valleys-bad-bet-gulf

Publish Date: 2026-06-11 00:00:00

When President Donald Trump returned from a trip to the Gulf in May 2025, he trumpeted $2.2 trillion in bilateral deals the United States had signed with Qatar, Saudi Arabia, and the United Arab Emirates. In addition to defense and economic partnerships, a significant share of those deals addressed artificial intelligence—and, specifically, building American AI infrastructure in the Gulf. The proposition for American technology companies was compelling: abundant cheap energy, access to capital from sovereign wealth funds, lower regulatory barriers for data center construction, and U.S. government approval for previously restricted chip sales. For Washington, the deals offered an opportunity to speed up advancements in American AI capabilities and incentivize the Gulf to partner less with China on AI.

But recent events have revealed a major risk: the infrastructure that such critical technology relies on is under attack, caught in the crossfire of a war it was not prepared for. On March 1, Iran hit two Amazon Web Services data centers in the UAE with a barrage of Shahed drones; an AWS facility in Bahrain was also damaged, likely with debris from a nearby strike. The Islamic Revolutionary Guard Corps claimed the facilities supported U.S. military AI operations, which could make them legitimate targets under the laws of armed conflict. (Although the U.S. military uses AWS, there is no publicly available evidence that these particular facilities supported U.S. military operations, as the IRGC claimed.) The effective closure of the Strait of Hormuz and disruption in the Red Sea also put at risk the submarine cables that carry the vast majority of data traffic between Asia, Europe, and the Gulf.

These campaigns are inflicting serious short-term costs on the users of those networks, both civilian and military. But the bigger problem is that investment in the Gulf is not limited to new bilateral technology partnerships between the United States and a handful of Gulf…

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