The Impact of the US-Iran War on AI Infrastructure and Global Supply Chains

The ongoing conflict between the United States and Iran has significant implications for artificial intelligence (AI) infrastructure and global supply chains, particularly in the semiconductor and technology sectors. As the war escalates, it has led to threats against tech companies, disruptions in helium supply, and damage to critical data centers, raising concerns about the future of AI investments in the Middle East.

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In spring 2025, President Donald Trump visited the Middle East, promoting the region as a burgeoning hub for AI development. Countries like Saudi Arabia and the United Arab Emirates (UAE) have heavily invested in AI as part of their economic diversification strategies. However, the recent conflict has jeopardized these ambitions, with drone and missile strikes targeting data centers in the UAE and Bahrain, disrupting essential cloud services.

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Major tech companies, including Amazon, Microsoft, and Google, have established significant operations in the Gulf, leveraging the region's energy resources for AI infrastructure. However, the Islamic Revolutionary Guard Corps (IRGC) has threatened these companies, warning employees to evacuate their workplaces due to potential attacks. This escalation has raised alarms about the security of tech investments in the region.

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The war has also severely impacted the global supply of helium, essential for cooling semiconductor manufacturing processes. The Ras Laffan helium complex in Qatar, a major supplier, has been damaged by Iranian drone and missile strikes, leading to increased prices and supply shortages. Taiwan's semiconductor industry, heavily reliant on helium, is pivoting to alternative sources in the US and Canada to mitigate disruptions.

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Experts have voiced concerns about the AI sector's vulnerability due to its reliance on a limited number of geopolitically sensitive resources. Ralf Gubler from S&P Global Energy noted that the helium supply issue underscores a broader dependency on a few critical nodes, which could threaten the stability of AI development.

Iran war chokes helium supply, tying up even more AI resources

In response to the conflict, Amazon has reported disruptions to its data center services in Bahrain and the UAE, prompting the company to assist clients in migrating workloads to other regions. Despite the challenges, Amazon's cloud computing division remains optimistic about long-term investments in the Middle East, with CEO Matt Garman expressing confidence in the region's potential.

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The ongoing war's economic fallout could reshape tech spending in the region. Analysts suggest that if the conflict persists, companies may need to reassess their investment strategies, potentially delaying projects and curtailing expansion plans. The urgency for Gulf states to diversify their economies may accelerate their push into AI, as they seek to mitigate risks associated with oil dependency.

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• “If it goes on for a couple months, I think you have to reassess just about everything,” — Paul Meeks, Head of Technology Research, Freedom Capital Markets

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• “The war is leaving data center investment up in the air,” — Ginger Matchett, Geostrategist, Atlantic Council

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• “They’re very resolute that the show is going to go on,” — Marc Einstein, Research Director, Counterpoint Research

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The US-Iran conflict continues to pose significant challenges for the AI sector, highlighting vulnerabilities in supply chains and infrastructure that could have lasting effects on technological advancements in the region.

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