Rising tensions in West Asia are weighing on global technology networks, with experts warning that threats by Iranian forces to target US-linked digital infrastructure in the Gulf could expose billions of dollars of investment to conflict-related risks.On Wednesday, Iranian forces warned they could attack facilities linked to major technology companies in the Middle East and Israel, including Google, Microsoft, Palantir, IBM, Nvidia and Oracle. The region hosts more than 70 operational data centers with an estimated 557-738 MW of live IT capacity, as well as 10 cloud regions operated by Amazon Web Services, Microsoft Azure, Google Cloud, Oracle, and Alibaba. An additional $30 billion of projects are also under development.
Recent events have already exposed the weakness of such infrastructure. Reports of a drone attack on two AWS facilities on March 3 disrupted the operations of businesses including Emirates NBD, Snowflake and PolicyBazaar UAE, while also affecting banking applications and stock market activity in the UAE. “Incidents of this scale typically generate millions of dollars in combined operating losses when infrastructure repairs, service downtime and mitigation costs are included,” said Matvey Dyadkov, a technology investor and advisor to Gulf businesses. “Cloud operators must repair damaged equipment and restore systems, while customers will bear the costs of disrupted digital services.”According to earlier reports, amid the growing uncertainty, hyperscale cloud operators like Microsoft Azure and AWS are exploring the possibility of shifting workloads from data centers in Dubai, Abu Dhabi and Oman to relatively safe hubs like India and Singapore. Industry officials say such disruptions could also have an indirect impact on Indian companies that depend on globally hosted digital systems. “Consumer and FMCG companies like HUL or Nestle rely heavily on globally hosted ERP (enterprise resource planning), supply-chain, finance and analytics platforms,” said an executive at a global consulting firm. “Disruptions in cloud availability or regional data-center operations could disrupt forecasting, procurement, billing and distribution systems in India with downstream impacts.”The Gulf also serves as an important medium for global Internet traffic, with approximately 90 percent of Europe-Asia data flows passing through submarine cable routes supported by approximately 20 undersea cable systems and 13 active Internet exchange points. The same executive said, “Undersea cables and regional network hubs represent latent risks not because of persistent attack, but because temporary outages or rerouting can degrade performance, increase latency and destabilize time-sensitive digital services across continents.”Experts caution that workforce and cyber-security challenges could increase operational vulnerabilities. Siddharth Vishwanath, partner and risk advisory leader at PwC India, said traditional companies also face risks in a highly interconnected digital ecosystem. “What is at stake is service availability, data integrity and trust in the shared digital platforms that underpin global commerce,” he said.Analysts also see the threats as a reminder of the growing geopolitical dimension of technology infrastructure. “US technology vendors should take these threats as a signal that digital infrastructure is now part of geopolitical conflicts,” said Ashish Banerjee, senior principal analyst at Gartner. “They must ensure that critical workloads can fail over to other cloud regions if a disruption occurs.”Dependence on supply chains could further complicate the scenario. Dyadkov said about one-third of global helium production is concentrated in Qatar, a key input for semiconductor manufacturing. “If supply from the region is disrupted, it could impact chip production, equipment repair and the ability to manufacture new semiconductor devices,” he said.