Middle East war risk: Iran threat to target US tech infrastructure in Gulf raises fears of global digital disruption

Escalating tensions in West Asia are casting a shadow over 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 investments to conflict-related risks.

On Wednesday, Iranian forces warned they could strike facilities linked to major technology companies including Google, Microsoft, Palantir, IBM, Nvidia and Oracle across the Middle East and Israel. The region hosts more than 70 operational data centres with an estimated 557-738 megawatts of live IT capacity, alongside 10 cloud regions run by Amazon Web Services, Microsoft Azure, Google Cloud, Oracle and Alibaba. Projects worth an additional $30 billion are also under development.




Recent incidents have already highlighted the vulnerability of such infrastructure. Reports of a March 3 drone attack on two AWS facilities disrupted operations for 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 tens of millions of dollars in combined operational losses when infrastructure repair, service downtime, and mitigation costs are included,” said Matvii Diadkov, technology investor and advisor to Gulf businesses. “Cloud operators must repair damaged equipment and restore systems, while customers absorb the cost of interrupted digital services.”

Amid growing uncertainty, hyperscale cloud operators such as Microsoft Azure and AWS are exploring the possibility of shifting workloads from data centres in Dubai, Abu Dhabi and Oman to relatively safer hubs like India and Singapore, according to earlier reports. Industry executives say such disruptions could also have indirect effects on Indian firms that depend on globally hosted digital systems. “Consumer and FMCG firms such as HUL or Nestlé rely heavily on globally hosted ERP (enterprise resource planning), supply-chain, finance and analytics platforms,” said an executive at a global advisory firm. “Disruption to cloud availability or regional data-centre operations can interrupt forecasting, procurement, billing and distribution systems, with downstream effects in India.”

The Gulf also serves as a critical conduit for global internet traffic, with about 90 per cent of Europe-Asia data flows passing through submarine cable routes supported by around 20 undersea cable systems and 13 active internet exchange points. “Undersea cables and regional network hubs represent latent risk, not because of constant attack, but because temporary outages or rerouting can degrade performance, increase latency and destabilise time-sensitive digital services across continents,” the same executive said.

Experts caution that workforce and cyber-security challenges may add to operational vulnerabilities. Siddharth Vishwanath, partner and risk consulting leader at PwC India, said even traditional companies face exposure in a highly interconnected digital ecosystem. “What is at stake is service availability, data integrity and trust in 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 tech vendors should treat these threats as a signal that digital infrastructure is now part of geopolitical conflicts,” said Ashish Banerjee, senior principal analyst at Gartner. “They should ensure critical workloads can fail over to other cloud regions if disruptions occur.”

Supply chain dependencies may further complicate the outlook. Diadkov noted that around 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 affect chip production, equipment repair, and the ability to build new semiconductor devices,” he said.

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