In May 2025, US President Donald Trump led a major investment delegation to the Middle East targeting key allies Saudi Arabia, Qatar, and the United Arab Emirates (UAE). The delegation included Silicon Valley leaders from OpenAI, Nvidia, Oracle, Cisco, SoftBank, Microsoft, Amazon, and Google. This trip underscored the region's strategic focus on AI-driven economic growth through data centers.
The Gulf states, especially the UAE and Saudi Arabia, have elevated AI and data center development into national policy priorities. At the time of Trump's visit, the massive investment drive centered on building AI data centers, with nearly all leading Silicon Valley firms signing cooperation agreements with Gulf countries.
However, ten months later, ongoing conflict in the Persian Gulf has cast a shadow over these ambitions.
So far, the direct impact on the AI industry remains limited; aside from a strike in early March 2026 damaging Amazon's data center in Dubai, few facilities have been targeted. Some AI data center projects began construction at the end of 2025, but the regional instability threatens the security needed for their future operations.
Attacks on data centers or the severing of undersea cables could disrupt critical infrastructure even beyond the levels seen today. From the perspective of tech giants, exposing their AI infrastructure to the persistent geopolitical tensions of the Middle East is likely untenable.
Major investments in the Middle East by Silicon Valley giants include:
First, the UAE's state-owned AI firm G42 is partnering with OpenAI, Nvidia, Oracle, Cisco, and SoftBank to build the "Stargate UAE" project totaling 5GW capacity in Abu Dhabi, with an initial 200MW cluster expected online in 2026.
Second, Microsoft invested US$1.5 billion in G42 and plans to invest US$15.2 billion in the UAE by 2029, with US$10.1 billion specifically allocated for AI infrastructure.
Third, Saudi Arabia's National Data Center Strategy aims to complete 1.9GW of data center capacity by 2030 and 3.4GW by 2034, with total investments reaching US$77 billion.
Plenty of other deals have been made, including Amazon Web Services's planned US$5.3 billion investment in Saudi Arabia, Google Cloud's intended joint US$10 billion venture with Saudi Arabia's Public Investment Fund (PIF), and Oracle plans to invest over US$1.5 billion in the country.
While not all projects may reach completion, many began construction before the end of 2025. Even if only a portion of them are eventually completed, this would position the Gulf as a pivotal player in the global AI data center landscape.
However, to advance their ambitions of becoming a center of data center development, Gulf states must not only push for an immediate ceasefire to the conflict, but also assure Silicon Valley partners that the region will remain stable for years ahead.
The prolonged conflict initiated by the US and Israel raises profound uncertainties about the future of the Middle East's AI infrastructure. Silicon Valley's elite are carefully weighing these risks as they plan their next moves.
Article translated by Lily Hess and edited by Charlene Chen
