In recent years, the Gulf countries have regarded advanced technology as the core pillar of the economic diversity plan. In it, abundant fossil energy, large-scale electric energy at relatively cheap prices, makes this the attraction point for consumer data-building projects - the spinal base of AI and cloud computing.

The race between the countries grew more dynamic, with UAE actively supporting many major initiatives, through the AI MGX and G42 investment platform, both created by Mubadala - the national investment fund of the $385 billion - Abu Dhabi's

While Saudi Arabs want to deploy tens of billions of dollars into AI and lower data, in the Vision 2030 framework. The state investment fund is holding nearly $1,000 billion of this country's realizing ambition through HUMAIN.

Founding last year, HUMAIN scored several agreements, including collaboration with xAI and AirTTTBN for data centre projects in Saudi Arab Saudi Arabia. Amazon is also in collaboration with HUMAIN building a new AI center.

Qatar did not want to miss the opportunity and founded Qai. The company incorporates operations with the Qatar Investment Foundation value of nearly $600 billion and is working with the Brookfield Property Management Group.

  • Black Catri rose after the raid in Sharjah City, UAE on the third day. Image: AP*

But the Iranian war suddenly broke out late February, with two Amazon data centers in UAE being targeted. "The conflict is taking the AI floor to the front line literally, which only 1.2 years ago is considered unlikely", Mrs. Abdullah Ray, deputy director and researcher at Geotech Center as part of the study of the Atlantic Council (US), commented.

As a result, the decision to invest in a number of data centers in the Gulf has either been temporary or time-saving. Gary Wojtaszek, CEO Pure Data Center Group of Oaktree Capital Management, said the company delayed investment decisions in the Middle East, although continuing to "plan and discuss" about them.

Mark Richards at the BCLP law- specializing advisory for large-scale data centers, stating that investment decisions are taking more time due to risk related activity in the area having serious threats. According to him, the risks that were not in the initial investment point were now introduced into the price process.

According to Mrs. Daggett Ray, the war "marked a transition". Because previously, risk management focused mainly on cyber security threats, digital interruptions, not on direct military threats. "And this has changed, with drone strikes," she pointed out.

In addition, the cheap electric advantage of the Gulf region is loose. Countries such as UAE have long provided relatively low industrial electric prices, approximately .11/kWh, compared to 0.25 - 0.40 dollars or higher in many European areas.

According to *CNBC, cheap electricity is now uncertain, as the energy market shook and the Sea Strait of Hormuz is blocked, it created the largest oil disruption in history, according to the International Energy Agency (IEA). Gas prices at UAE increased by 30% in April. Brent oil prices were higher than 55%, from approximately 72 dollars per barrel to nearly $120 at peak in the last three months.

For the Gulf, the impact is increasingly structural. The increased power market tightens and dynamics forces governments to transfer additional costs to large industrial users such as the data centre.

** About the long term, the "Big" AI area says the fight did not reduce the ambitions of the**. The spokesman G42 said the orientation was constant and the belief "only grew stronger". The company claims that AI will "be the foundation for the economy and society like electricity".

CEO HUMAIN Tareq Amin asserts ambition has never been limited to opening data centers. "We are building the entire AI ecosystem, from critical infrastructure and computing capacity, to models, platforms and applications," he said. He pointed out that Saudi Arabs had strategic advantages in scale, with vast areas, rich energy sources, world-class connections corridors.

Mark Richards from BCLP said that he was still receiving new requests regarding large-scale data centers in the Middle East. While, Gary Wojtaszek of Pure DC says still "very optimistic" and continues to advance investment plans at UAE and Saudi Arab Saudi Arabia.

When asked by CNBC whether or not to delay investment in the Gulf Area, Amazon re-directed CEO Matt Garman's statement that "long-term investment". Google and Microsoft refused to comment. Cisco and Orcale did not respond.

Even so, the conflict has also "breaks the illusion of long-term stability in the Gulf", thereby changing the value of investment in this place, according to Aalok Mehta, director of the Institute of Strategy and International Research (CSIS) in Washington.

Prior to that, IEA estimated that the global investment into the 2026-2030 period data centers would reach $3,900 billion, the "too large" figure so that AI companies could manage themselves. PIF, the Saudi Economic Transaction Fund, had recently adapted the strategy, cut or narrowed some of the project.

Mr. Aalok Mehta claimed that developing data centers in the future would be more expensive and take more time, due to the costs of infrastructure reinforcement, anti-driving technology, increased insurance fees and problems related to supply chain.

Mrs Ray at Atlantic Council suggested "the physical family" of data centers, even built underground. In addition, investors should consider variety in many places, including foreign countries. "The data centre level that UAE needs to meet global ambition and the area doesn't necessarily have to be set entirely at UAE," she said.

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