UAE Reworks Massive AI Data Center Project After Iranian Attacks Raise Security Concerns

(Reuters) The United Arab Emirates is quietly reconsidering plans for a 5-gigawatt artificial intelligence data center project one of the largest such developments outside the United States as the war involving Iran has prompted officials to reassess how and where critical infrastructure should be constructed, according to six people familiar with the matter.

The project was initially planned as a 10-square-mile (26-square-kilometer) campus in Abu Dhabi. It is now likely to be redesigned as a network of data centers distributed across several locations in the UAE, four sources said. All spoke on condition of anonymity.

Authorities are also examining additional measures to protect the facilities against potential drone and missile attacks, including air-defense systems and underground construction, according to the sources. The possible changes to the project’s design have not previously been reported.

DATA CENTER PROJECT IS CENTRAL TO UAE’S GLOBAL AI AMBITIONS

Plans for the UAE-US AI Campus, being developed with American technology companies, were announced during President Donald Trump’s visit to the Gulf state last year.

The project is a key part of the UAE’s effort to establish itself as a global AI hub while reducing its economic dependence on oil. It is being led by G42, an artificial intelligence company controlled by Sheikh Tahnoun bin Zayed al Nahyan, the UAE national security adviser and brother of the country’s president.

As part of an agreement giving the UAE access to Nvidia AI chips and other advanced American technology, the country agreed to reduce its AI-related ties with China and invest in the Stargate initiative’s U.S. data centers. Stargate is a joint venture involving OpenAI, Oracle and SoftBank that is focused on developing AI infrastructure.

The sources who spoke with Reuters included a U.S. official, a Western diplomat and industry executives who had been briefed on the discussions. Reuters could not establish how close Emirati authorities are to approving a revised master plan or determine how significantly the proposed changes could affect construction costs and schedules.

Construction of the project’s first phase, a $30 billion, 1-gigawatt computing cluster called Stargate UAE, began last year. The initial 200 megawatts of capacity are expected to become operational this year. Once fully completed, the facility is expected to have enough capacity to connect every UAE government agency and commercial institution with the world’s most advanced AI models, according to Larry Ellison, Oracle’s chairman and chief technology officer, whose company is working with G42 on the project.

Asked about possible changes to the development, G42 said construction of the AI campus was continuing according to plan.

“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,” the company said, without providing further details.

OpenAI said it was collaborating with the UAE on its AI objectives and making “good progress on the infrastructure and adoption priorities needed to deliver it.”

The UAE’s advanced technology ministry and the project’s other American partners, including Nvidia, Oracle and Cisco, did not respond to requests for comment. Japan’s SoftBank declined to comment.

IRAN TARGETS U.S.-LINKED TECH INFRASTRUCTURE

According to the sources, Emirati officials began reassessing their AI infrastructure strategy shortly after Tehran launched missile and drone attacks against Gulf states hosting American forces. The attacks came in response to U.S. and Israeli strikes against Iran.

Two Amazon Web Services data centers in the UAE were damaged during attacks in March, as was another facility in Bahrain. Amazon’s cloud services in the region remain disrupted, according to the company’s latest website updates.

In April, Iran’s armed forces released a video warning that Stargate UAE could also be targeted. The video displayed a map that purportedly identified the location where the complex was being constructed and carried the caption: “Nothing stays ​hidden from our sight.”

Two people familiar with the situation confirmed that the project is located near Al Dhafra Air Base, a location that had not previously been publicly disclosed. The base, situated outside Abu Dhabi, hosts U.S. troops and has come under attack during the war, which began in February.

Daniel Benaim, who served as U.S. deputy assistant secretary of state for Arabian Peninsula affairs under President Joe Biden, described the conflict as an “economic earthquake” for Gulf states that had spent years presenting themselves as secure destinations.

“Changes to harden critical infrastructure are vitally necessary,” said Benaim, a fellow at the Middle East Institute, a Washington-based think tank. “Every ​country in the region is going ⁠to look at what they can do to reduce the risk” and reassure international partners and investors.

The first stage of construction at the UAE’s AI campus is expected to proceed, although officials are considering modifications designed to shield the site from aerial attacks, according to an industry executive and another person briefed on the matter. The sources said the remaining portions of the project are likely to be distributed among several locations.

Officials are also considering placing facilities containing the most sensitive information, including military data, underground or inside mountains, according to the two sources. Data centers in the United States, China and Europe have previously been constructed in abandoned mines, Cold War-era bunkers and caves.

Most of the UAE consists of flat desert terrain because of its location on the southeastern Arabian Peninsula. However, mountain ranges extend through portions of the country’s north and northeast, particularly in the emirates of Ras Al Khaimah and Fujairah.

Three sources said the redesigned project is expected to incorporate air-defense capabilities, including systems designed to intercept drones and missiles as well as electronic-jamming equipment. Another source said additional measures could include blast-resistant concrete along with redundant power and cooling systems.