18 American tech giants named by Iran: Is Middle Eastern data center and cloud service investment losing its appeal?

As the conflict continues, investments by tech giants in the region are facing risks.

According to Xinhua News Agency, on March 31, Iran’s Islamic Revolutionary Guard Corps issued a statement saying it would designate companies and institutions related to 18 U.S. information and communications technology and artificial intelligence companies in the Middle East region as “lawful strike targets.”

The statement said, “Employees of the above institutions are advised to leave their workplaces immediately to protect their own safety,” and residents within a 1-kilometer radius around these institutions should also leave their homes and go to safe locations.

Also, according to CCTV News, on March 31, the Iranian military issued a statement saying that, in response to attacks by Israel and the United States on Iran’s infrastructure, starting from early that day, Iran deployed attack drones to strike the industrial software center of the German Siemens company located near Ben Gurion Airport in Israel, as well as the communications center of U.S. telecommunications company AT&T located in Haifa, Israel.

Which institutions are involved?

The 18 companies listed in the notice include Microsoft, Google, Apple, Meta, Oracle, Intel, Hewlett-Packard, IBM, Cisco, Dell, Palantir, Nvidia, Tesla, JPMorgan Chase, General Electric, and Boeing, as well as the UAE tech company G42 and the Dubai cybersecurity company Spire Solutions.

G42, headquartered in Abu Dhabi, is a major player in the UAE AI ecosystem. Its behind-the-scenes investors include the UAE sovereign wealth fund Mubadala, Microsoft, the private equity firm Silver Lake, and the Dalio Family Office. The company co-founded the technology investment firm MGX with Mubadala, entered into a $1.5 billion partnership with Microsoft, and spearheaded the development of the “Stargate UAE” park. Spire Solutions, meanwhile, collaborates with governments, financial institutions, telecom companies, energy companies, and other enterprises in the Middle East and Africa.

In this round of the Middle East conflict, U.S. technology companies have been threatened multiple times. On March 11, Iran’s official side released a list of targets, including the offices and infrastructure of Google, Microsoft, Palantir, IBM, Nvidia, and Oracle. The announcement said these enterprises are linked to Israel, and the relevant technologies have been applied to the military field. According to CCTV News, on March 2, Amazon Web Services stated that three of its data centers in the Middle East were hit by drone attacks, causing severe business disruption.

“Based on experience from recent conflicts, data centers are indeed becoming closer to new strategic targets.” Sun Chenghao, an associate research fellow at the Center for Strategy and Security Studies at Tsinghua University, said in an interview with First Financial that in the past, military strikes often targeted oil and gas facilities, power plants, ports, and communications hubs because these were the “lifeblood systems” of industrial society. In the era dominated by AI and cloud computing, computing power and data infrastructure are turning into the “nerve center” of national operations. “More importantly, data centers often rely heavily on electricity, cooling, and backbone networks. They don’t need to completely destroy the entire facility—just disrupting power supply, cooling, or key network nodes can cause long-lasting outages and spill over into financial, logistics, government, and military systems.” He said.

Will this shake U.S. tech giants’ investment in the Middle East?

In recent years, the Middle East has drawn attention from U.S. tech companies thanks to abundant capital, low-cost energy, flexible regulation, and the geographic advantage of being close to the African and European markets. Companies such as Google, Microsoft, and OpenAI have poured in, sparking a construction boom in infrastructure such as AI software development and data centers. U.S. President Trump has also helped facilitate cooperation between Silicon Valley and Gulf countries. During his visit to Saudi Arabia last May, the AI company HUMAIN, fully owned by the Saudi sovereign wealth fund PIF, reached cooperation with Nvidia and AMD. Over the next five years, the investment could reach as much as $10 billion, and it will deploy 500 megawatts of AI hardware infrastructure.

According to data from market research firm IDC, last year, total technology spending by consumers and businesses in the Middle East was estimated at $65 billion, higher than the $36 billion in 2020. Of that, technology spending on data centers and cloud services grew year over year by 75%, reaching $895 million.

However, as the conflict continues, tech giants’ investments in the region face risks. In addition to the aforementioned security risks, the industry also faces supply chain disruptions, soaring natural gas prices needed by data centers, and rising costs of bulk commodities such as plastics and aluminum required to manufacture electronic components, among other issues. Xiaomeng Lu, director of Eurasia Group, a political risk consulting firm, said that this round of the Middle East conflict will weaken the efforts of Gulf countries to attract large technology companies, “and their ambitions need to be built on geopolitical stability.”

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