A major data center company has paused investments in AI infrastructure projects and data centers in the Middle East amid the Iran war, the company’s CEO told CNBC.
The future of large-scale digital infrastructure projects in the Middle East is uncertain as oil prices soar and regional conflicts significantly disrupt supply chains.
Assets in the region have become military targets, and shortages of key materials needed to build AI infrastructure are predicted. A data center in Abu Dhabi operated by Oaktree company Pure DC was hit by debris from an Iranian attack.
“Investment decisions for all data center opportunities have been paused. No one wants to develop new data centers or deploy new GPUs until things calm down,” Gary Wojtaszek, CEO of the company, told CNBC.
“No one is going to run into a burning building, so to speak,” he said in an interview Tuesday. “I don’t think anyone is going to do anything with a large infusion of new additional capital until everything settles down.”
The slowdown comes as Gulf states position themselves as central players in the AI boom, with huge spending in the Middle East by governments as well as hyperscalers and data center developers looking to exploit cheap electricity and land.
Wojtaszek said PureDC still believes there are “long-term opportunities” in the Middle East, adding that long-term “planning and discussions” continue regarding data center projects in the region.
Pure DC has operations in the United Arab Emirates and has plans to expand to Riyadh, Saudi Arabia, although its Abu Dhabi data center on Yas Island was hit by debris.
In March, AWS facilities in the UAE and Bahrain were attacked by Iranian drones, resulting in the outage of banking, payments, business, and consumer services.
“While the current macro-political environment may be slowing sector investment, digital demand remains unchanged,” Wojtaszek said in a statement last week.
“The region’s ambitious national vision recognizes the transformation enabled by digital government, enterprise modernization and future-ready workforces.”
data center employees
As data centers become critical infrastructure, front-line employees face increased safety risks, and Pure DC offers some benefits to staff in the Middle East, Wojtaszek said.
“We’re not mandating anyone to go into a facility. They have to make a decision based on what’s right for them and their family…It’s a really tough situation,” he said, adding that workers who choose to remain on site will have “additional comforts.”
Some of these benefits include location flexibility for non-essential workers who can travel abroad with their families and work remotely, as well as additional benefits packs for all staff members.
Data center developers are now focusing on ways to remotely control their facilities through electronic means.
William Self, chief workforce strategist at Mercer, a global workforce consulting firm, previously predicted that data center workers could increasingly see “hazard pay” included in their paychecks in the future.
“You can also imagine some kind of psychological strain on people who work in facilities where they know very well that they may be dangerous targets or bad actors. That could add to the types of compensation that we look at to attract this population to these centers,” Self said.
