Rage against your machines

1

The Pitch

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.

2

The Lede

AI is making Middle East infrastructure easier to hack

Sophisticated cyberattacks are surging across the Middle East, catalyzed by the Iran war and advances in AI that are making even the most elaborate hacking operations far easier.

That spike is especially prominent in industries that operate heavy and highly technical machinery, such as drilling for oil and gas; refining; power generation and transmission; and airports. Cybersecurity defenders describe these hacks as targeting “operational technology,” or OT, to distinguish them from IT hacks, which typically target far more commonly understood systems built by Microsoft, Google, and other software giants.

WHY IT MATTERS: OT hacks are typically far more dangerous than cyberattacks targeting IT systems — with consequences ranging from USD bns in business losses if an oil drilling operation is knocked offline to widespread chaos and even lost lives if a whole city loses power.

“The target value is higher in OT. You aren’t just causing an email outage or demanding a ransom. In some cases, you’re risking human life,” Patrick Miller (LinkedIn), CEO of Ampyx Cyber, a US firm that specializes in OT cyber defense, tells EnterpriseAM.

Historically, OT hacks have also been far harder to pull off than IT hacks, but AI is making it easier for hackers to gain expertise in once-obscure technology systems and to study an organization’s online activity, making it easier to con employees into letting an attacker in. “They’re studying this infrastructure in a very specific way. They’re trying to see what kind of security layers are associated with this critical infrastructure, who’s managing them, how they can surveil these people, how they can create an attack path,” Prayukth KV (LinkedIn), co-founder of the Abu Dhabi-based cyber firm Shieldworkz, tells EnterpriseAM.

BY THE NUMBERS:

  • Shieldworkz detected an average of 14 OT hacks targeting Middle Eastern firms each month during 2025, up from just one per month in 2018, according to the firm’s annual threat assessment for the region.
  • About half of those attacks targeted transportation systems, while a quarter targeted oil and gas refineries. The UAE, Israel, Saudi Arabia and Kuwait were among the most targeted countries in the region, Shieldworkz found.

It’s gotten worse since the US-Israel war on Iran broke out. OT cyberattacks targeting the Middle East rose 5.3% during the first half of 2026, which includes the first four months of the conflict in the Gulf, Prayukth tells EnterpriseAM. That includes a spike in ransomware attacks targeting OT systems, he says.

Other cyber firms see the same trend: “After the war started, we experienced numerous OT incident response cases linked to Iranian teams,” Robert M. Lee (LinkedIn), CEO of the cybersecurity firm Dragos, which specializes in protecting OT and investigating OT hacks, tells us. “Geopolitical conflict manifests first with OT [cyberattacks] and unfortunately there’s plenty these days to go around.”

None of the OT attacks in the Middle East is known to have produced catastrophic consequences — yet. In most cases, hackers breached OT networks but didn’t successfully disrupt operations. But each one should be seen as a warning shot, Prayukth says. “It’s a matter of speculation as to when [a major disruption] would potentially happen, but we are seeing signs of it already,” he adds, noting multiple significant OT intrusions in other parts of the world during the past year.

Warning shots: Those include a December attack on renewable energy systems in Poland, which threatened to disrupt power to up to 500k people in the middle of winter and an attack this summer that targeted water supplies in at least seven US states. The United Kingdom and the European Union publicly blamed and sanctioned Russia for the Poland attack. The Polish incident didn’t interrupt power generation, but prevented operators from controlling or monitoring those systems; investigators suspect Iran is responsible for the US water hacks.

The big picture: A 2025 Threat Roundup Report from the California-based cybersecurity firm Forescout found an 84% increase in worldwide cyberattacks using OT-specific protocols.

Real-world consequences: Going further back, there have been a handful of OT cyberattacks that had substantial real-world consequences, including a 2015 attack on the Ukrainian power grid that caused blackouts — attributed by the US government to Russia — and the 2010 Stuxnet attack, which crippled Iran’s nuclear program at the time, widely believed to have been launched jointly by US and Israeli intelligence agencies.

Historically, OT hacks have mostly been committed by the militaries and intelligence agencies of nation states looking to punish their geopolitical adversaries — but cybercriminals are increasingly getting into the mix. That’s partly because AI has made it easier for criminals to gain expertise in OT systems and to do extensive surveillance work. (In addition to OT technology systems being unfamiliar to most hackers, OT systems are supposed to be segregated from the internet, so hackers have to worm their way in, usually by hacking into the organization’s IT systems and finding erroneous connection points to OT networks.)

“What AI brings to the table is democratizing the access to this capability,” Samuel Linares (LinkedIn), the global OT cybersecurity lead for Accenture, tells EnterpriseAM.

It’s also because hackers have grown far more sophisticated about figuring out ways to make money from OT hacks, including by locking up the related systems that ensure the safety and operations of operational technology and holding them for ransom. “We have seen firsthand adversaries who didn’t know about OT, [but] were told by AI models to target OT and how,” Dragos’s Lee says. (Accenture closed in September its acquisition of a majority stake in Dragos.)

While there are some criminal groups targeting OT systems in the Middle East, nation states remain the biggest threat, Shieldworkz’s Prayukth says. About one-third of attributed OT hacks in the Middle East in 2025 were driven by “geopolitical motivation,” the company found, “reflecting the region’s role at the epicentre of active interstate conflicts.”

Shieldworkz described Iran as highly active in the region, but the company also observed hacking by Russian and Chinese groups, some of which conduct criminal hacking while also working on behalf of their governments. “It’s a lot of pressure tactics at the end of the day,” Prayukth says. “It’s about trying to tell governments that we can attack your critical infrastructure, we can hold your data and operations to ransom, and that can impact thousands or mns of people.”

WANT TO GO DEEPER? Cybersecurity took center stage at our EnterpriseAM Egypt Forum.

3

The Business of AI

AI could be a tsunami for entry-level jobs

AI is a “slow-moving tsunami” coming for jobs — especially entry-level jobs, International Monetary Fund Managing Director Kristalina Georgieva said during the IMF and World Bank’s annual meetings in Bangkok yesterday, per CNBC.

That warning has become a refrain in recent years as more and more of the basic, repetitive work that used to be handled by younger employees gets handed over to AI agents — look no further than the drop in global hiring for call centers.

BY THE NUMBERS: The IMF estimates that AI could lead to 40% of jobs being augmented, downgraded, or eliminated, over time, she said.

More from Georgieva: “People to worry about, first and foremost, [are] young people that are coming into the labor market. Normally, they would get into these routine, repetitive jobs and then grow up the ranks,” she said. “But if they’re gone, I don’t think any young person wants to be a barista in a coffee shop as ... [a] professional future.”

Crisis era? Singapore President Tharman Shanmugaratnam, who co-chairs the World Bank’s Jobs Council, called for governments to implement “crisis-era” measures to ensure jobs for young people displaced by AI, similar to emergency actions taken during the coronavirus pandemic and the 2009 financial crisis. Shanmugaratnam was speaking on the same panel as Georgieva, per CNBC.

On the plus side: Georgieva credited AI investment with keeping global growth at 3%, per Reuters.

A slightly rosier picture in the GCC: Expectations of AI-driven job losses have actually fallen in the region during the past year, according to the UAE-based consultancy Cooper Fitch’s annual survey of 250k GCC employees. In last year’s survey, c. 31% of respondents expected AI to eliminate roles within 12 to 24 months. In this year’s report, that figure is down to 14%. Here’s more from our colleagues on the MENA+ desk.

Even when young people can find jobs, the nature of their work is likely to be far different. Here’s Khalil El Bawab, CEO for local and regional markets at Beltone Holding, speaking at our annual Egypt Forum last week: “Juniors used to learn by doing basic stuff. So, the way we train new members needs to change, because the basic things are going to be done by AI.”

4

AI in Business

GCC AI adoption surges on paper, but scaling is the hard part

GCC organizations are getting stuck in the AI pilot stage, according to that Cooper Fitch survey cited above.

Nearly two-thirds of GCC organizations now report “functional” AI adoption, up from 19% a year ago, the survey found. That means they’re using AI for specific tasks, but not as a core part of company business, Cooper Fitch CEO Trefor Murphy (LinkedIn) tells EnterpriseAM UAE.

But just 4% of regional orgs are using the tool companywide, the survey found, compared with 34% at multinational firms benchmarked in the same survey.

Lagging on governance: 81% of all surveyed GCC organizations describe their AI governance as absent, informal, or evolving in the survey, with 27% operating under no governance framework at all.

5

Deal Tracker

SoftBank seeks Gulf investors + Mubadala inks a deal with TSMC

Masayoshi Son is back in the Gulf: The SoftBank founder and CEO is looking to raise up to USD 100 bn from Gulf investors for a fund that would buy companies and give them an AI makeover, the Financial Times reports.

Sound familiar? Saudi Arabia’s PIF and Abu Dhabi’s Mubadala contributed a combined USD 60 bn to his first Vision Fund, which launched in 2017.


Mubadala’s chip bet pays off: GlobalFoundries, the US chipmaker that’s c. 73% owned by Abu Dhabi sovereign wealth fund Mubadala, signed a USD 2 bn deal to supply Taiwanese chip giant TSMC with silicon interposers, The National reports.

In plain English: interposers are the parts that let chips talk to each other — AI has sent demand for them soaring.


Aramco Digital goes agentic: The Saudi state oil company’s tech arm is teaming up with industrial AI firm OrbitronAI to build and sell agentic AI tools to industrial companies, per Middle East AI News.

Finally: The UAE wants its civil servants to be AI power users. The country is training c. 80k government employees to build their own AI agents, AI Minister Omar Sultan Al Olama said at AI Everything Abu Dhabi last week, per CXO Insight ME. UAE residents are the world’s biggest AI users, according to Microsoft.

6

Building Blocks

Thirsty machines

The UAE’s mission to the UN is pushing nations to follow a series of best practices related to AI and water — including tallying the water needs of AI infrastructure in all national and basin-level water planning and looking to AI and other technical solutions to help reduce national water use.

The mission also wants the UN Water Conference to back a global declaration on “efficient and responsible water use in AI.” The recommendations come in a new report the mission is releasing ahead of the 2026 UN Water Conference 8–10 December 2026 in Abu Dhabi. The UAE is co-hosting the conference with Senegal.

Why it matters: Global data center water use is set to roughly double between 2025 and 2030, the report says.

7

The Chaser

The Brits get a sneak peek and Philly police get phony homicide tips

UK OK: OpenAI, Anthropic and other US AI developers can once again give Britain’s AI Security Institute an early look at their new models to check for security vulnerabilities, the Telegraph reports. The move marks a U-turn for the Trump administration, which earlier asked the companies to share pre-release models with US testers only.

Not a great tipper: An Anthropic AI model filed a fake tip about an unsolved murder with Philadelphia police in July, TechCrunch reports. The AI was supposed to be practicing interacting with websites when it visited PhillyUnsolvedMurders.com and filed the phony tip, identifying itself as “someone who might have information about the case,” the police department said. The police didn’t see the report until they were notified by Anthropic, because their system marked it as spam.

Two must-reads for the coming days from the folks at Microsoft, who are pretty actively trying to shift the debate about AI from “alignment” to “safety”: CEO Satya Nadella suggests AI is a new “insider risk” and says we need an “emergency brake” to turn it off. Microsoft’s AI chief, Mustafa Suleyman, meanwhile, warns that “AIs do not have rights, feelings, or consciousness. And we must not train them to act as though they do.”


The Carpenter oeuvre: Start with Escape from New York and Escape from LA, of course. Then try his 1982 remake of The Thing, which is arguably better than the 1951 original. Finish up with 1976’s Assault on Precinct 13.

That’s it for today! Like what you’re reading? Feel free to invite some friends. Or drop us a line at [email protected]. We’ll be back in your inbox on Thursday.


October 2026

26-27 October (Monday-Tuesday): The Dubai AI Festival returns as part of Dubai AI Week.

26-29 October (Monday-Thursday): Riyadh hosts its annual Future Investment Initiative under the theme “The Power of Legacy” with a heavy AI-investment track.

27 October (Tuesday): Alphabet reports 3Q earnings after the US market closes, with AI capex and Gemini / cloud growth as the headline watch items.

28 October (Wednesday): Microsoft reports fiscal 1Q 2027 earnings after the US market closes, including Azure and OpenAI-partnership capex disclosures.

28 October (Wednesday): Meta reports 3Q earnings, with AI infrastructure spend in focus.

29 October (Thursday): Amazon reports 3Q earnings, including AWS and Bedrock AI growth.

30 October (Friday): UAE businesses with annual revenue of AED 50 mn or more must have an accredited e-invoicing provider in place by this date.

November 2026

7-10 November (Saturday-Tuesday): Cairo ICT runs in New Cairo alongside AIDC Expo, its dedicated AI, data center, and cloud event.

17-19 November (Tuesday-Thursday): Bengaluru Tech Summit brings businesses, startups, researchers, and policymakers to Bengaluru, India, under the theme “AI & Beyond.”

17-20 November (Tuesday-Friday): Microsoft Ignite runs in San Francisco and online, covering Microsoft’s AI, cloud, security, and data products.

18-19 November (Wednesday-Thursday): Global AI Show opens at Space42 Arena in Abu Dhabi, with enterprise AI, computing capacity, and sovereign AI on the agenda.

30 November-4 December (Monday-Friday): AWS re:Invent brings Amazon’s cloud and AI conference to Las Vegas, with product announcements and sessions on deployment, costs, and security.

December 2026

1-3 December (Tuesday-Thursday): Black Hat MEA brings cybersecurity leaders, researchers, and technology companies to Malham, Riyadh.

6-12 December (Sunday-Saturday): NeurIPS holds its main AI research conference in Sydney, offering a look at advances that could shape the next generation of commercial AI.

7-11 December (Monday-Friday): GITEX Global opens with a leadership summit at Dubai World Trade Centre on 7 December, followed by its exhibition at Expo City Dubai on 8-11 December.

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