The recent Iranian missile strike on an Amazon data centre in the UAE has exposed a critical vulnerability in global tech infrastructure: the dangerous concentration of data centres in geopolitically unstable regions. This mirrors the semiconductor industry's over-reliance on Taiwan, where 92 per cent of high-end chips are produced. The incident raises urgent questions about why major tech companies and governments have pushed so much AI infrastructure into the Middle East.

Despite obvious risks, the US has allowed substantial data centre development in the Gulf, driven by massive subsidies and cheap energy from countries like the UAE and Saudi Arabia. The 1GW Stargate project in the UAE represents just the beginning, with plans for 150GW of new data centres across the US. Tech giants including Microsoft and OpenAI have invested heavily in the region, attracted by financial incentives while avoiding the political and economic complexities of building infrastructure domestically.

The concentration problem extends beyond physical security. These Gulf data centres, serving companies that dominate US market value, create systemic risk that could amplify financial market disruptions during geopolitical conflicts. While data centre planners typically account for redundancy and backup systems, the current Iran conflict reveals that traditional risk models may have underestimated the impact of missile attacks on critical infrastructure. The tech industry now faces the costly reality that building AI capacity in a fractious world comes with vulnerabilities that cannot be easily engineered away.