The US-Israeli military campaign against Iran, which began in late February 2026, has introduced a layer of strategic uncertainty into a region that had attracted tens of billions of dollars in AI and data centre commitments from Microsoft, Google Cloud, Amazon Web Services, Oracle and a constellation of sovereign-backed entities. The assumption underpinning all of it, that the Gulf offered cheap and abundant energy, stable governments, strategic geographic positioning and enthusiastic policy support, has not collapsed, but it has been significantly complicated.

The most immediate signal came on 28 February, when Iranian drone strikes hit three AWS data centre facilities across the UAE and Bahrain. Two hyperscale facilities in the UAE sustained direct hits, while a third in Bahrain suffered heavy collateral damage. The attacks cut power across multiple availability zones, triggering fires and extended outages that disrupted banking, payments, enterprise and consumer services across the Gulf. Millions of residents in Dubai and Abu Dhabi found themselves temporarily unable to make digital payments or access cloud-dependent services. The Islamic Revolutionary Guard Corps claimed responsibility, framing the strikes as targeting dual-use technology infrastructure.

The incidents forced a question that the regional technology sector had not previously needed to ask: whether data centres require missile defence. Until now, operators and policymakers had focused security planning on perimeter access and cyber threats. State-level drone and missile strikes on concrete infrastructure hosting AI workloads represent a categorically different risk class, and one that legal experts note likely constitutes an unlawful targeting of civilian infrastructure under international humanitarian law.

Beyond the physical damage, the conflict has eroded the energy cost equation that made the Gulf so attractive in the first place. Disruption to the Strait of Hormuz and damage to regional energy assets have driven Brent crude prices sharply higher, weakening the assumption that hydrocarbon-subsidised electricity would continue to underwrite AI campus expansion at scale. The planned 5GW AI hub outside Abu Dhabi, a centrepiece of G42’s sovereign compute ambitions, and Saudi Arabia’s Hexagon data centre at King Abdullah Economic City, a USD 2.7 billion facility targeting 480MW of GPU-dense capacity, both now face heightened scrutiny from investors and insurers recalibrating their risk models for the region.

Yet the picture is not uniformly negative. Technology leaders across the UAE and Saudi Arabia describe the current moment less as a strategic rupture and more as a real-world stress test. “The current situation hasn’t changed our strategy; it has validated it,” one UAE-based CIO told Computer Weekly. The argument runs that geopolitical volatility strengthens rather than weakens the case for sovereign digital infrastructure and local AI ecosystems, reducing dependence on infrastructure located in geopolitically exposed zones.

That logic is already reshaping investment decisions at the margin. Gartner projected regional IT spending would reach USD 169 billion in 2026, and Gulf governments have shown no public sign of retreating from their digital transformation timelines. Saudi Arabia designated 2026 the Year of Artificial Intelligence in March, with SDAIA president Abdullah Al-Ghamdi framing the designation as a commitment to embedding AI as a trusted national capability rather than a discretionary investment. Saudi tech conference LEAP, postponed from April to late August due to the conflict, remains on track with its programme of founders, investors and policymakers unchanged.

The more consequential question is what the conflict does to timelines rather than ambitions. Project delivery requires international contractors, equipment shipments through Hormuz-adjacent logistics corridors, and the willingness of global hyperscalers to deploy capital in a wartime environment. Those variables are now harder to predict than they were in January.

For MEA Tech Watch readers, the practical read is this: the Gulf’s AI infrastructure buildout is not reversing, but it is entering a new phase in which resilience, sovereignty and distributed architecture have moved from aspirational principles to operational priorities, and in which the definition of infrastructure risk has permanently expanded.

The company stated that it is actively working to migrate affected customers to alternative AWS regions while recovery efforts continue. However, details regarding the extent of the disruption and the expected recovery timeline have not been disclosed.

This marks the second incident impacting AWS infrastructure in Bahrain since the escalation of the regional conflict. Earlier disruptions also affected facilities in Bahrain and the UAE, primarily due to power outages.

AWS is a critical backbone for global digital infrastructure, supporting major websites, enterprises, and government operations. Any disruption in its services can have cascading effects across multiple sectors.

Amazon has advised customers with workloads in the affected region to proactively shift operations to other regions to ensure continuity.

The incident highlights the growing vulnerability of digital infrastructure to geopolitical conflicts, as cloud services become increasingly central to global economies.

Originally set for April 13–16, the event will now take place from August 31 to September 3 at the Riyadh Exhibition & Convention Centre. Organisers cited security concerns, travel disruptions, and regional instability linked to the ongoing conflict as key factors behind the decision.

The postponement reflects a broader pattern across the region, where major events have been delayed or cancelled amid airspace closures, travel advisories, and heightened security risks. Industry gatherings, sporting events, and conferences across the Gulf have faced similar disruptions.

LEAP has rapidly grown into one of the world’s largest technology events, attracting over 200,000 attendees and serving as a major platform for investment announcements, partnerships, and innovation across sectors such as AI, fintech, smart cities, and sustainability.

Organisers confirmed that preparations will continue for the rescheduled dates, with plans to deliver an expanded program while ensuring safer and more reliable conditions for international participation.

The shift highlights how geopolitical tensions are increasingly impacting global business events, even as Saudi Arabia continues its push to position itself as a leading technology and innovation hub under Vision 2030.

According to the survey, 44% of organisations cited a lack of skilled cybersecurity professionals as a key challenge, while 42% pointed to the difficulty of managing multiple security priorities simultaneously. These constraints are limiting the ability of companies to effectively monitor third-party risks and respond to evolving threats.

The study also underscores structural weaknesses. Around 34% of respondents reported that their contracts lack clear IT security obligations for vendors, while 35% indicated that non-IT staff do not fully understand cybersecurity risks. These gaps further weaken organisational resilience against supply chain attacks.

Globally, 83% of businesses acknowledge the need to strengthen their defences against supply chain and trusted relationship threats, yet only 17% believe their current measures are effective. Adoption of protective practices remains inconsistent, with no single mitigation method used by more than 41% of organisations. Even widely recognised measures such as two-factor authentication are implemented by just 39% of respondents.

Additionally, only 41% of companies conduct regular reviews of their contractors’ cybersecurity posture, leaving nearly two-thirds without continuous visibility into partner risks. This lack of oversight increases vulnerability across extended digital ecosystems.

The report notes that organisations that have already experienced supply chain attacks tend to adopt stronger security practices. These include requesting penetration test results, verifying compliance with industry standards, and assessing suppliers’ own supply chain security policies.

To address these challenges, Kaspersky recommends a combination of strategic and operational measures. These include adopting managed security services, investing in cybersecurity training, conducting thorough supplier evaluations, embedding security requirements into contracts, and strengthening collaboration with partners on security practices.

Sergey Soldatov, Head of Security Operations Center at Kaspersky, emphasized that overstretched and understaffed security teams leave organisations exposed to threats that can move undetected across provider networks. He stressed the need for unified mitigation strategies, stronger contractor assessments, and improved cross-team awareness.

He added that supply chain security must become a shared responsibility across the entire business network, supported by preventive measures and a more strategic approach to supplier relationships.

The countries covered under this free roaming initiative include Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. The offer applies to local calls and calls to Armenia.

Viva subscribers can also access useful contact information provided by Armenian embassies in the region for assistance:

• Iran: +98 902 0059927
• Israel: +972 58 607-0313 (WhatsApp), +972 58 581 1144
• UAE: +971 506144624, +971 509367385, Consulate General in Dubai: +971 58 567 0993
• Kuwait: +965 25322175, +965 90065454, +965 25322174
• Oman: +968 93812337
• Qatar: +974 44919232, +974 33303979
• Iraq: +964 7818465511 (WhatsApp), Consulate General in Erbil: +964 7519279793 (WhatsApp)
• Ministry of Foreign Affairs (Armenia): +374 55620111 (WhatsApp)

This initiative ensures that Viva subscribers stay connected during critical times across the region.

The initiative covers Globe Prepaid, TM and Postpaid subscribers currently in Saudi Arabia, the United Arab Emirates, Bahrain, Qatar and Kuwait. Eligible users will automatically receive 1GB of data, 15 minutes of calls and 15 SMS, valid for seven days. Customers will be notified via SMS once the package has been activated.

Partner networks covered under the offer include STC and Zain in Saudi Arabia; du and e in the UAE; Batelco and Zain in Bahrain; Ooredoo and Vodafone in Qatar; and Ooredoo Kuwait and stc Kuwait.

Globe also announced that customers in Iran connected through MTN Irancell will receive billing adjustments and load assistance.

The move comes amid escalating conflict involving the United States, Israel and Iran, with Philippine President Ferdinand Marcos Jr. confirming the first reported Filipino casualty linked to the crisis. The company said the roaming relief package is intended to help affected Filipinos stay connected with their families during the ongoing tensions.

Smartphone shipments in the Middle East, excluding Turkey, reached 54.8 million units in 2025, marking a 13 percent increase and the third consecutive year of double-digit growth. The market ended the year on a high note, with fourth-quarter shipments rising 20 percent year-on-year to 14.9 million units.

Growth was supported by a wave of flagship launches, expanded financing and trade-in programs, strong tourism-driven retail demand, and ongoing device upgrade cycles across Gulf markets. As the market matures, profitability and brand positioning are becoming increasingly critical alongside shipment volumes.

Samsung and Apple together accounted for approximately half of all shipments in the fourth quarter of 2025, highlighting the strength of established premium ecosystems and customer loyalty.

Samsung’s performance was driven by a dual strategy that combined flagship innovation with a broad portfolio of mid-range and entry-level devices. While premium models stimulated upgrade demand, its wider product range ensured strong reach across price-sensitive segments. Analysts noted that regional upgrade demand is increasingly concentrated among brands offering robust product portfolios, financing options, and strong retail distribution.

Gulf markets played a central role in sustaining regional growth. Saudi Arabia remained the largest market, expanding 14 percent year-on-year and representing around 27 percent of total shipments. The United Arab Emirates grew 12 percent, supported by refresh cycles and promotional activity. Kuwait recorded 8 percent growth, while Qatar rose 6 percent, reflecting steady replacement demand. Iraq also maintained significant shipment volumes despite market volatility.

These markets benefit from mature financing ecosystems, high tourism inflows, and strong consumer appetite for premium devices, aligning closely with Samsung’s growth strategy.

Competition intensified during the year. HONOR emerged as the fastest-growing major vendor, with shipments surging 94 percent year-on-year. TRANSSION experienced shipment declines but continued repositioning toward value-focused offerings through TECNO. Xiaomi recorded a modest decline, reflecting its heavier reliance on entry-level volumes.

Rising component costs and selective supply constraints are expected to create additional pressure on volume-driven Chinese manufacturers, potentially reinforcing Samsung’s relative stability in the region.

Looking ahead, smartphone shipments in the Middle East are projected to decline by 8 percent in 2026 amid tighter supply conditions and affordability pressures. However, leading vendors are expected to prioritize scale markets such as Saudi Arabia and the UAE, where premium demand remains resilient.

Over the longer term, the market is forecast to transition toward steady replacement-driven growth, reducing volatility. For Samsung, this shift aligns with its strategy of combining premium innovation with comprehensive portfolio coverage, supporting continued regional leadership.

The agreement, signed during Capacity Middle East 2026, aims to expand network capacity, enhance reliability, and future-proof the infrastructure as demand continues to rise for high-speed internet, enterprise connectivity, and emerging digital technologies. The modernization is expected to improve resilience across regional networks while supporting long-term digital growth.

Hani Askar, Chief Global Business Officer of Batelco, said the continued collaboration with e& Carrier & Wholesale Services reinforces efforts to strengthen regional digital infrastructure and create a more robust foundation for advanced connectivity services. He noted that upgrading the Fiber Optic Gulf network supports evolving connectivity requirements and contributes to a more competitive and resilient telecommunications ecosystem.

The initiative forms part of broader infrastructure investments announced during Capacity Middle East 2026, where Batelco also entered new strategic partnerships with Tata Communications and Tencent to further enhance Manama IX, Bahrain’s first Internet Exchange Point (IXP), reinforcing the country’s position as a regional connectivity hub.

The new “South Route” connects Kazakhstan and neighboring Central Asian markets to the UAE through diverse, multi-operator terrestrial fiber segments. The route leverages TNS Global’s fiber-optic infrastructure across Kazakhstan and its network of more than 30 transborder connections, providing an alternative to traditional transit pathways and enhancing network resilience.

According to e&, the corridor is designed to support growing international capacity demand driven by hyperscale infrastructure, cloud interconnectivity, and carrier-grade services. The new route also improves path diversity and reduces dependency on single transit corridors, delivering low-latency performance with a round-trip delay of approximately 48 milliseconds between Dubai and Almaty.

Nabil Baccouche, Group Chief Carrier and Wholesale Officer at e&, said the initiative strengthens regional interconnection capabilities while reinforcing the UAE’s role as a key digital hub serving surrounding markets. He noted that the corridor complements e&’s broader interconnection fabric and supports increasing demand for high-performance connectivity across international networks.

Obaid Rahman, Group CEO of TNS Global, said the project forms part of a wider strategy to position Central Asia as a digital bridge between continents by building scalable terrestrial connectivity corridors linking Europe, Asia, and the Middle East. He added that the collaboration enables more resilient and flexible connectivity options for operators, enterprises, and global partners across the region.

The new corridor reflects ongoing investments in terrestrial fiber infrastructure aimed at strengthening regional digital integration, supporting cloud growth, and enabling diversified connectivity routes across emerging digital markets.