Ars Technica AI | April 29, 2026

A data center developer has paused all Middle East project investments after one of its facilities was damaged by an Iranian missile or drone attack. The decision comes as the Iran war is forcing Silicon Valley investors and tech companies to rethink a trillion-dollar plan to build more AI and cloud data centers in Gulf countries. The damaged data center is owned by Pure Data Centre Group, a London-based company that is operating or developing more than 1 gigawatt of data center capacity across Europe, the Middle East, and Asia. Iran has directly struck two Amazon Web Services (AWS) data centers in the United Arab Emirates, while a near-miss from an Iranian one-way attack drone damaged a third AWS data center in Bahrain. The Iranian attacks caused structural damage, disrupted power delivery, and triggered fire suppression systems that caused water damage. Amazon chose to waive customer charges in its Middle East cloud region for the entire month of March 2026, costing an estimated $150 million. The Iranian Revolutionary Guard Corps has directly threatened retaliation against US companies identified as having Israeli links, releasing lists of targets that included offices and data centers operated by Google, Microsoft, Palantir, IBM, Nvidia, and Oracle.

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