Renewed Iran threats could signal trouble for Gulf AI

Happy Tuesday everyone, and welcome to EnterpriseAM AI + Innovation! There are 18 days to go before Halloween. Just long enough to stream the entire Halloween franchise (minus the Rob Zombie remakes), one per night, and still have seven nights left to dig deep into the rest of John Carpenter’s filmography. Trust us, you won’t regret it. Now, let’s get going.

Hostilities are picking up this week between the Gulf countries and Iran and its proxies, signaling danger ahead for the region’s burgeoning AI economy.

Renewed threats: Mohsen Rezaei, head of Iran's Supreme National Security Council, renewed threats over the weekend to target “cables, data centers, AI facilities and other sites in the region” if fighting breaks out again.

Rezaei’s comments come after months of intermittent fighting between Iran, the US and Israel and as Iran-aligned Houthi forces in Yemen have launched a series of deadly attacks on the main airports in Riyadh and Dammam.

Rezaei’s threats to tech infrastructure follow April attacks that severely damaged two Amazon facilities in the UAE and one in Bahrain. Amazon has been unable to restore access to cloud services in Bahrain and parts of the UAE since then, the company said in September. The Iranian Revolutionary Guard Corps has also threatened to target the Gulf assets of 18 companies it considers complicit with the US government, including US tech giants and the UAE’s G42.

Definitely not out of the woods: The Gulf’s major AI building projects (totaling more than USD 70 bn in announced commitments) have largely proceeded on schedule since the launch of the war. Western AI firms that invested in those projects have signaled that they’re staying the course and Microsoft even pledged USD 2 bn in additional spending to our part of the world.

And yet… A prolonged war that specifically targets AI infrastructure could force global tech companies to rethink the value proposition of placing a large share of AI infrastructure next door to an avowed and heavily-armed adversary.

US President Donald Trump has said he will not attack Iran again before midterm elections in November, but he’s given no indication of long-term plans to either step up or end the conflict, which is unpopular with well over half the US population.

A strike this past Saturday on the passenger terminal at King Khalid International in Riyadh killed 13 people and injured more than 300 others. Officials have said King Khalid will stay closed through Saturday, 17 October.

The Houthi strikes are likely to dampen international attendance at the Future Investment Initiative, Mohammed bin Salman’s flagship investor conference, scheduled for 26-29 October at the King Abdulaziz International Conference Center. The gathering has historically been the site for numerous major AI announcements. Here’s more from our EnterpriseAM Saudi desk.

A new normal for warfare: A similar story is playing out more than 4k km away in the long and brutal war between Russia and Ukraine. Each has increasingly launched drone attacks this year aimed at damaging the other’s economy — especially the AI and tech sectors.

Ukrainian drones struck and partially disabled two data centers in the past week operated by Yandex, which is often called “Russia’s Google.” One of the data centers houses two of the three supercomputers used to develop Yandex’s AI model, Reuters reports. The attacks followed multiple Russian strikes against Ukrainian data centers and telecommunications infrastructure during the past month.

Ukraine has undertaken major efforts to protect its most precious data from attack, including by moving some data facilities underground and storing some data outside the country’s borders — lessons that are now being followed closely in the Gulf.

Now let’s get to today’s Lede, which looks at how AI is supercharging cyberattacks against complex machinery in the MENA+ region that runs refineries, power grids, and airports.