UAE moves AI data centers underground after Iranian strikes

The United Arab Emirates is abandoning its plan for a single massive AI data center campus, instead dispersing facilities across multiple emirates and moving critical server infrastructure underground into blast-reinforced bunkers — a direct response to Iranian drone and missile strikes that have already crippled cloud computing operations in the Gulf.

From Megacampus to Bunkers

The original blueprint called for a contiguous 26-square-kilometer, five-gigawatt data center megacampus on the outskirts of Abu Dhabi, built as part of a joint US-Emirati initiative. That design has been quietly scrapped. Sources familiar with the project confirmed to Reuters that vulnerabilities exposed during hostilities with Iran prompted the UAE Ministry of Defence to demand a dispersed network of smaller, segmented installations, according to Atalayar. Engineers are now working to place key server arrays inside blast-reinforced concrete bunkers, with subterranean excavations being evaluated in the mountainous northern emirates of Ras Al Khaimah and Fujairah for sensitive government and defense workloads.atalayar

The redesign follows Iranian strikes in March that damaged two Amazon Web Services Amazon.com, Inc. ↘ 0.35% data centers in the UAE and a third facility in Bahrain. According to The Wall Street Journal News Corp ↘ 0.03%, those facilities remain largely non-operational months later, with AWS advising customers to transfer data to alternative locations without providing a timeline for repairs. In April, Iranian military channels released footage of the joint US-Emirati AI construction site overlaid with satellite coordinates and a direct threat, further raising alarm given the site's proximity to Al Dhafra Air Base, home to US Central Command forces.wsj+1

Defense Layers and a Shifting Gulf

The Emirati government now plans to deploy dedicated point-defense air defense batteries around dispersed data nodes, backed by electronic warfare counter-drone jamming systems, in coordination with the Pentagon. BlackRock ↗ 0.70% CEO Larry Fink predicted that much of Gulf Cooperation Council infrastructure will need to go underground over the next decade to survive drone attacks.sedaily+1

The Boring Company, Elon Musk's tunneling firm, recently raised $3 billion in a Series D round at a $23 billion valuation, with proceeds earmarked for building more than 150 kilometers of underground tunnels for autonomous vehicles across the UAE.sedaily

Stargate UAE Presses Forward

The infrastructure underpins the UAE's post-hydrocarbon economic strategy and is led by G42, the technology holding group chaired by Sheikh Tahnoun bin Zayed Al Nahyan. The bilateral framework, finalized during a visit by President Donald Trump, saw Abu Dhabi divest from Chinese technology partnerships in exchange for US Commerce Department export licenses for advanced Nvidia ↗ 2.78% accelerator chips. The opening phase, designated Stargate UAE and carrying a $30 billion capital valuation, still aims to bring an initial 200 megawatts of capacity online before year-end. Oracle ↗ 0.82% co-founder Larry Ellison has said this capacity will supply computing pipelines linking government ministries to frontier AI models.atalayar

G42 told Reuters that construction schedules remain on track and that operational adjustments reflect standard security best practices. OpenAI affirmed that development continues with regional counterparts, while Nvidia, Oracle, Cisco ↘ 1.95%, and the UAE government declined to comment.atalayar