A major data center company has paused its plans to invest in AI infrastructure and data centers in the Middle East. The CEO told this is due to the ongoing conflict with Iran. The war has caused oil prices to jump and supply chains to break down, making the future of large digital projects in the Middle East uncertain.
Assets in the region have become military targets. Experts predict shortages of key materials needed to build AI infrastructure. For example, shrapnel from an Iranian attack hit a data center in Abu Dhabi, which Oaktree-owned Pure DC operates.
Pure DC’s CEO, Gary Wojtaszek, told they have put all investment decisions on hold for “all data center opportunities.” He said, “No one wants to develop new data centers and put new GPUs in until things get settled.” “No one’s going to run into a burning building, so to speak,” he said in an interview on Tuesday. “No one’s going to put in new additional capital at scale to do anything until everything settles down.”
This slowdown comes after a period of huge spending in the Middle East by governments, as well as big tech companies and data center builders. These groups wanted to use the region’s cheap electricity and land, as Gulf states aimed to become key players in the AI boom. Wojtaszek still sees “long-term opportunity” in the Middle East for Pure DC. He added that longer-term “planning and discussions” about data center projects there are still happening.
Pure DC operates in the United Arab Emirates, where its Abu Dhabi data center on Yas Island was hit. The company also plans to expand in Riyadh, Saudi Arabia. In March, Iranian drones hit Amazon Web Services (AWS) facilities in the UAE and Bahrain, causing outages for banking, payments, and other business and consumer services. “While the current political situation may have slowed investment in this sector, digital demand remains strong,” Wojtaszek said in a statement last week.
He added that the region’s big national goals recognize how digital technology helps with modern governments, updated businesses, and a future-ready workforce. As data centers become critical infrastructure, workers on site face growing safety risks. Wojtaszek said Pure DC offers some benefits to its Middle East staff.
“We’re not making anyone be in the facility, they have to decide what’s right for them and their family…It’s a really tough situation,” he said. He added that workers who choose to stay on-site will get “additional comfort.” Some perks include letting non-essential workers leave the country with their families and work remotely. All staff members also receive extra welfare packages.
The data center company is now focusing on how to run its facilities remotely using electronic systems. William Self, a strategist at Mercer, a global consulting firm, previously suggested that data center workers might increasingly see “hazard pay rates” included in their salaries in the future. Self said, “You could also imagine a certain emotional burden for people who work in facilities that they know might be prime targets for bad actors, which could also lead to higher pay packages to attract people to these centers.”
