UAE Splits a 5-Gigawatt AI Campus After Iranian Strikes

The United Arab Emirates is recasting a planned 5-gigawatt AI campus after Iranian strikes, turning one 10-square-mile Abu Dhabi site into a dispersed, hardened network. People familiar with the deliberations say officials are adding air defenses and studying underground and mountain halls. Middle East data centers are still being built. The commercial cloud that already took the hits is not the part that is winning.

G42, the Abu Dhabi AI group that leads the campus, says work is progressing as planned while the design stays under security review. Amazon Web Services told customers in March that recovery would be prolonged. Its UAE and Bahrain regions were still listed as disrupted in September.

Iranian Strikes Made Gulf Data Centers Military Targets

The war opened on February 28, 2026, when the United States and Israel struck Iran under what Washington called Operation Epic Fury. Within days, Iranian drones and missiles reached U.S.-linked compute in the Gulf, not only oil terminals and bases.

Amazon’s cloud unit said two of its UAE facilities were directly struck and that a drone strike near a Bahrain site caused physical impact. Structural damage, lost power, and water from fire suppression followed. Two of the UAE region’s three availability zones were left significantly impaired, which is the redundancy model most tenants had paid for.

In April, Iran’s armed forces released a video that named Stargate UAE as a potential target, showed a map of the complex, and captioned it “Nothing stays hidden from our sight.” People familiar with the site later placed it near Al Dhafra Air Base, which hosts U.S. troops on the edge of Abu Dhabi and has been fired on during the war. Hiding a campus on consumer maps did not hide it from a state that already films the desert.

THE STRIKE CALENDAR ON GULF COMPUTE

1. February 28, 2026: U.S. and Israeli airstrikes hit Iran, and the wider Gulf war begins.
2. March 1-2, 2026: Amazon reports two UAE data centers directly struck and a Bahrain site damaged by a nearby drone.
3. Late March 2026: Iran’s Islamic Revolutionary Guard Corps lists 18 U.S. tech companies with regional sites as legitimate targets.
4. April 2026: A military video names Stargate UAE; Amazon’s Bahrain region is disrupted again; developers start talking about paused capital.
5. April 30, 2026: Amazon says restoring the damaged Gulf regions will take several months and tells customers to migrate.
6. September 11, 2026: People briefed on UAE planning say the 5-gigawatt campus will likely become a network of sites, not one 10-square-mile showpiece.

Khatam al-Anbiya, an Iranian construction and engineering arm tied to the Guard, put the doctrine in a separate line that operators now treat as policy: “Nothing is hidden from our sight. All ICT companies in the region will be considered legitimate targets for us.” Data halls sit next to the same U.S. force presence that Tehran chose to punish. Concentration, not just software, is now part of the target set.

AWS Still Cannot Restore Its UAE and Bahrain Regions

Amazon’s own March status language is still the cleanest record of what kinetic damage does to a cloud region. “These strikes have caused structural damage, disrupted power delivery to our infrastructure, and in some cases required fire suppression activities that resulted in additional water damage,” the company said. Recovery, it added, would be prolonged given the physical damage.

By late April, Amazon said restoration in Bahrain and the UAE would take several months, recommended that customers move accessible resources to other regions, and suspended relevant billing while the sites were down. Banks, payment apps, and consumer services that had treated a local availability zone as enough were told, in public, to restore from remote backups.

That is the commercial-cloud loss. A multi-availability-zone design failed when two zones in one country were hit together. Six months later the public health page still described the regions as unable to reliably support customer applications. Latency-sensitive work that had to stay in-country had nowhere local to fail over to.

Gary Wojtaszek, chief executive of Pure Data Centre Group, which operates in Abu Dhabi and has plans in Riyadh, put the investor version of the same problem in April. “No one’s going to run into a burning building, so to speak,” he said. “No one’s going to put in new additional capital at scale to do anything until everything settles down.” The company later told the trade press it remained committed to the market, that drone debris was found on the broader campus rather than in a live hall, and that customer talks had not stopped. Both statements can sit together. New outside capital froze; the existing Gulf book did not vanish.

Who Still Pours Concrete After the Drones

State-backed builders are the other side of that split. They can fund halls that private war cover will not. They can also absorb a redesign that would kill a leveraged project.

Stargate UAE is the first international Stargate deployment, a 1-gigawatt cluster in Abu Dhabi with 200 megawatts expected to go live in 2026, paired with Emirati money into U.S. Stargate sites. OpenAI listed G42, Oracle, NVIDIA, Cisco, and SoftBank as partners, in coordination with Washington and the U.S.-UAE advanced technology framework. G42 is controlled by Sheikh Tahnoun bin Zayed al Nahyan, the UAE national security adviser. In return for advanced U.S. chips, the UAE agreed to cut AI ties with China. That U.S. link is also what put the campus on an Iranian map.

Khazna Data Centers, the G42 unit building the halls, has said it has not seen a slowdown in customer demand and that the first 200 megawatts remain on a 2026 calendar. An executive at a state-backed AI firm said in September that work on the site never stopped and that the first 200-megawatt phase was almost complete. OpenAI said it was making “good progress on the infrastructure and adoption priorities needed to deliver it.” SoftBank declined to comment. NVIDIA, Oracle, and Cisco did not answer questions about the redesign.

Saudi Arabia is the relative winner on the kinetic ledger, because no comparable hits on its halls have been reported. The Ministry of Communications and Information Technology puts sector investment since Vision 2030 above SR16 billion (4.26 billion dollars). Installed capacity rose from 68 megawatts in 2021 to around 440 megawatts in 2025 and 467 megawatts in the first quarter of 2026. Humain, backed by the Public Investment Fund, is raising an initial 2.5 billion dollars and still describes a rollout of 1.9 gigawatts by 2030 and 6.6 gigawatts by 2034, with 211 land plots tied to power. DataVolt has a 1.5-gigawatt campus planned at NEOM’s Oxagon site. Amazon has separately said it will make up to 50 megawatts available in Saudi Arabia’s first AI Zone by 2028.

Announced gigawatts are not the same as power that is cooled, energized, and rentable this quarter. That is the only buyer question the war has made unavoidable.

THREE GULF BETS AFTER THE STRIKES

Microsoft president Brad Smith said in April that the company was reevaluating how it designs and builds data centers in high-risk regions. Google, Microsoft, Amazon, and Oracle all still have regions live or in development across the Gulf. The ones that can wait out a war on a state balance sheet are not the same as the ones that invoice by the hour.

Abu Dhabi’s 10-Square-Mile Campus Is Being Split

The original pitch was a single 10-square-mile (26-square-kilometer) campus in Abu Dhabi, among the largest AI sites planned outside the United States. People briefed on the new thinking say that first 1-gigawatt phase should continue, with extra protection against air attack, and that the rest of the 5-gigawatt plan will likely be spread across the country. That is a different product from the one sold in 2025.

Authorities are looking at drone and missile interceptors, electronic jamming, blast-resistant concrete, and extra backup power and cooling. For the most sensitive loads, including military data, they are studying underground halls and mountain sites in Ras Al Khaimah and Fujairah, the rare high ground on a mostly flat peninsula. Satellite-based trackers still project the first Abu Dhabi buildings to deliver 200 megawatts of IT power in 2026. The open question is how much of the remaining 4.8 gigawatts stays in one desert rectangle.

The project’s specifics are subject to continuous review in line with the security, resilience and operational standards expected of critical infrastructure at this scale.

G42, company statement, September 11, 2026

Daniel Benaim, a former U.S. deputy assistant secretary of state for Arabian Peninsula affairs and now a fellow at the Middle East Institute, called the conflict an “economic earthquake” for Gulf states that had sold themselves as safe havens. “Changes to harden critical infrastructure are vitally necessary,” he said. “Every country in the region is going to look at what they can do to reduce the risk.”

THE HARDENING MENU NOW ON THE TABLE

• Dispersal: Replace one 10-square-mile campus with a network of halls across several emirates so a single strike cannot take the load.
• Air defenses: Put interceptors, jammers, and blast-resistant shells around compute, power, and cooling, not only around air bases.
• Underground and mountain sites: Move the most sensitive data into bunkers and into Ras Al Khaimah and Fujairah high ground.
• On-site backups: Add extra generation and cooling so a grid or fuel hit does not finish what a drone started.

Israel already sells that design. Eli Matara, chief commercial officer at MedOne, said the firm built underground because man-made disasters there are missiles, and that inbound interest jumped by about 200 percent after this war began, including hyperscalers asking for at least one buried site. Oracle already uses a Jerusalem bunker under parking decks and a high-rise. Most Gulf halls, like the Amazon sites that were hit, were still above ground, with redundancy promised between sites rather than inside the slab. The UAE redesign is, in practice, an import of that Israeli lesson, paid for with sovereign cash.

Insurers Cut War Cover as Oil-Linked Power Stays Dear

The second loser is the insurance market that Western developers need and Gulf states can partly skip. Marsh, the largest global broker, said available war-risk capacity across the Middle East has fallen from more than 1 billion dollars before the conflict to between 250 million and 350 million dollars. Average political-violence and terrorism rates that sat at 0.2 percent to 0.3 percent of insured value have moved to 3 percent to 10 percent. If a campus needs a billion-dollar policy, the market no longer writes it.

Property and business-interruption forms have long carved out war. Gulf firms often never bought the political-violence layer in the first place. Uninsured physical loss then sits on the operator, which is why Amazon, not the tenant, ate the March outage and waived regional charges. Directors who skipped war cover now face a different question from shareholders, but the immediate effect is simpler: private capital wants a policy that does not exist at the old price.

THE ENERGY AND COVER STACK

• Global DC load: The International Energy Agency’s central view has data centre electricity use roughly doubling from 485 terawatt-hours in 2025 to 950 terawatt-hours in 2030, about 3 percent of world power, with AI-focused halls tripling.
• 2025 growth: Data-center electricity rose 17 percent; AI-focused sites rose 50 percent. Five tech firms’ capital spending topped 400 billion dollars and is expected to jump another 75 percent in 2026.
• Oil shock: The IEA now sees 2026 world oil supply down 5.7 million barrels a day, about 6 percent, with crude toward 110 dollars a barrel as Gulf flows stay impaired.
• War cover: Broker capacity of 250 million to 350 million dollars cannot wrap a multi-billion-dollar AI campus, so only balance sheets that can self-insure keep building at scale.

Operators in the region already said power is a larger share of running cost than in the last cycle, and that purchase agreements tied to gas or oil benchmarks are harder to budget. The Hormuz shock does not invent that problem. It makes every oil-linked kilowatt-hour a line on the same risk sheet as shrapnel. Cooling upgrades, higher inlet temperatures, and off-peak workload shifts are the cheap responses. On-site generation and renewable contracts are the dearer ones. None of them stop a drone.

Tenants Now Price Blast Walls Into the Contract

Cloud and colocation customers are already asking for fallback sites, alternate fiber, and generator fuel in writing. War and grid emergencies are moving into service-level carve-outs. Pricing will follow energy, insurance, and the extra concrete. Trading and gaming still want to sit near users; those racks now carry a local-risk premium that a cached copy in a quieter region does not.

Larry Ellison, Oracle’s chairman and chief technology officer, has said the finished Stargate cluster could connect every UAE government agency and commercial institution to advanced models. That is a sovereignty argument, and it is also why the load cannot simply leave. Data-residency rules keep some tenants inside the blast radius. The winners are the landlords who can sell a bunker. The losers are the tenants who bought a local zone and received a months-long migrate notice instead.

WHAT WE KNOW

• Physical damage: Two Amazon UAE sites were directly struck in March and a Bahrain site was damaged nearby; those cloud regions remained disrupted in September.
• Targeting: Iranian forces named Stargate UAE in an April video and listed 18 U.S. tech firms with regional sites as legitimate targets.
• Construction: G42 says campus work is progressing as planned; the first 200 megawatts are still due in 2026.
• Cover: War-risk capacity quoted by Marsh is 250 million to 350 million dollars, against campus plans measured in tens of billions.

WHAT IS UNCONFIRMED

• Masterplan: How close Emirati authorities are to a final dispersed-site map, and what it does to cost and timing, has not been settled in public.
• Underground share: Whether mountain and bunker halls are a study or a build, and which loads go below grade, is still a planning item.
• Amazon repair: No public date has been given for a full restore of the UAE and Bahrain regions.

The first 200 megawatts are still supposed to come on in 2026, on a site near a U.S. air base that Iran has already put on video. The 5-gigawatt campus that was meant to be one desert landmark is being broken up so that the next strike has more than one place to miss.