In May 2025, Trump flew to Riyadh with Sam Altman, Jensen Huang, and Andy Jassy and over the course of four years announced more Gulf AI infrastructure than the region had seen in the previous five years combined. The tech leaders invested in the five-gigawatt Stargate UAE and Google’s $10 billion HUMAIN partnership. By November, Microsoft had formally committed $15.2 billion to AI infrastructure in the United Arab Emirates, and xAI had announced a 500MW data center in Saudi Arabia. All of it is still under construction today.
Last July, two months after the Riyadh trip, Trump signed an executive order declaring data centers critical national security infrastructure and directing federal agencies to fast track their permitting.
Then last month, Iranian drones struck two existing AWS data centers in the UAE and damaged a third in Bahrain, marking the first confirmed military attack on a hyperscale cloud provider in history. The infrastructure Trump had spent a year calling a national security priority had just become a military target in a war the U.S. helped start.
Renewables are a security threat. Gulf AI is not.
The Iran war is laying bare a striking dissonance in what the Trump administration considers a national security threat.
In February 2025, the Interior Department issued a secretarial order describing a “precariously inadequate and intermittent energy supply” as creating “grid unreliability and national security risks” — and framing renewables as the cause. That order served as the legal justification for what had already begun: a Day 1 freeze on all federal permitting for onshore and offshore wind, extended by the Interior Department to cover all renewable energy including solar. By August, Interior Secretary Doug Burgum had formalized that logic into a new permitting standard requiring wind and solar projects on federal lands to match fossil fuels’ energy output per acre. “Gargantuan, unreliable, intermittent energy projects,” Burgum said at the time, “hold America back from achieving U.S. Energy Dominance.”
The cancellations followed. The Bureau of Land Management canceled the 6.2-GW Esmeralda 7 Solar Project in Nevada. The Department of Energy terminated the $4.9 billion loan for the Grain Belt Express, an 800-mile transmission line designed to deliver five-GW of wind and solar from Kansas to Indiana.
Then last summer, the One Big Beautiful Bill gutted the tax credit structure that had been instrumental in making wind and solar investments viable in the first place. In December, the administration paused five East Coast wind projects simultaneously, again citing national security.
While that campaign was underway, the administration was constructing the opposite policy for AI infrastructure. In January 2025, it rolled back the Biden-era AI Diffusion Rule, which had capped exports of advanced chips to Gulf states. Without that rollback, the May deal-making in Riyadh could not have happened at the same scale. The same framing that stalled bipartisan permitting reform by blocking offshore wind was being used simultaneously to accelerate AI infrastructure abroad.
Why the Gulf, and why gas
National security aside, the commercial logic behind the Gulf buildout makes sense when you understand what electricity costs there.
In the UAE and Saudi Arabia, industrial power runs at between five and six cents per kilowatt-hour — roughly half the U.S. rate — because Gulf grids run on oil and gas. Sovereign wealth funds can deploy capital at speeds and scales that private markets cannot match. Additionally, the geographic position between Europe, Asia, and the Global South creates real latency advantages for companies serving those markets. Taken together, these are legitimate reasons to build there.
However, they also mean that the AI infrastructure the administration has championed as a national security priority runs on foreign fossil fuel, in a region that the U.S. military has been defending for half a century, financed by sovereign wealth funds with their own geopolitical agendas. The executive order protecting domestic data centers does not extend to Abu Dhabi.
The same energy logic is playing out inside U.S. borders. Meta’s Louisiana data center, the company’s largest U.S. facility, is being powered by seven new gas plants through Entergy — in a state that passed a solar setback law the same legislative session, making the clean energy that could power it harder to build. Indiana is planning five gigawatts of new gas by 2034 specifically to serve incoming data centers, in a state whose 2025 legislature created a permitting fast lane for data center power plants — while explicitly writing wind and solar out of it.
At every levelAI infrastructure is getting built, gas is getting built to power it — and the renewable alternative that is actually far more insulated from geopolitical concerns is getting constrained.
What the strikes revealed
The AWS facilities that Iranian drones hit on March 1 were pre-existing infrastructure, built before Trump’s May trip to Riyadh. While only three of the Gulf’s 233 operating data centers were affected, the strikes caused structural damage, disrupted power delivery, and in some cases triggered fire suppression systems that produced additional water damage across multiple availability zones, AWS confirmed. Banking services, payment platforms, and consumer apps across the region went offline.
An internal memo obtained by the newsletter Big Technology described both the Bahrain and UAE regions as “hard down” and “unavailable for an extended period.”
Nonetheless, it’s highly likely that enormous investment in Gulf data centers will continue undeterred. One week after the strikes, Brookfield Asset Management confirmed its $20 billion AI infrastructure partnership with Qatar Investment Authority would proceed as planned. However, as Trump’s own envoy Steve Witkoff acknowledged at the Future Investment Initiative summit in Miami last month, the region now carries a “risk premium” from the threat of infrastructure being, in his words, “blown up.”
The AWS facilities that Iranian drones hit on March 1 were pre-existing infrastructure, built before Trump’s May trip to Riyadh. While only three of the Gulf’s 233 operating data centers were affected, the strikes caused structural damage, disrupted power delivery, and in some cases triggered fire suppression systems that produced additional water damage across multiple availability zones, AWS confirmed. Banking services, payment platforms, and consumer apps across the region went offline. An internal memo obtained by Big Technology described both the Bahrain and UAE regions as “hard down” and “unavailable for an extended period.”
Nonetheless, it’s highly likely that enormous investment in Gulf data centers will continue undeterred.One week after the strikes, Brookfield Asset Management confirmed its $20 billion AI infrastructure partnership with Qatar Investment Authority would proceed as planned.
However, as Trump’s own envoy Steve Witkoff acknowledged at the Future Investment Initiative summit in Miami last month, the region now carries a “risk premium” from the threat of infrastructure being, in his words, “blown up.”
The hyperscale buildout Trump personally brokered — Stargate UAE, the HUMAIN campuses — is still under construction in that same region, in a conflict zone his own envoy now says carries a risk premium.
