UAE Reworks 5-Gigawatt AI Data Center Plan After Iran Strikes

The United Arab Emirates is revising the blueprint for its 5-gigawatt AI data center project near Abu Dhabi, one of the largest such projects outside the United States, after the war between Iran and Israel prompted officials to rethink how and where critical infrastructure should be built, Reuters reported on September 11, citing six people familiar with the matter. What was originally planned as a single 10-square-mile (26-square-kilometer) campus will likely become a network of data centers spread across the UAE, according to four of the sources, who spoke on condition of anonymity. Technology outlet TheNextWeb, citing the same Reuters report, described the shift as splitting a $30 billion project into smaller, harder-to-target pieces.

The project, known as Stargate UAE, is the Emirati arm of the Stargate venture between OpenAI, Oracle and SoftBank, and is led by G42, the Abu Dhabi AI firm controlled by Sheikh Tahnoun bin Zayed al Nahyan, the UAE's national security adviser. Construction on its first phase, a $30 billion, 1-gigawatt compute cluster, began last year, with the first 200 megawatts due to come online in 2026, built around roughly 100,000 of Nvidia's Grace Blackwell GB300 chips. G42 told Reuters that work on the AI campus "was progressing as planned" and that the project's specifics are "subject to continuous review in line with the security, resilience and operational standards expected of critical infrastructure at this scale." OpenAI said it was "making good progress on the infrastructure and adoption priorities" needed to deliver its vision for the UAE. Nvidia, Oracle, Cisco, SoftBank and the UAE's advanced technology ministry did not respond to Reuters' requests for comment.

Iran named the site as a target

Emirati officials began reviewing their AI infrastructure plans after Iran started firing missiles and drones at Gulf states hosting American forces, in retaliation for US and Israeli strikes on Iran, according to Reuters' sources. Two Amazon Web Services data centers in the UAE, along with one in Bahrain, were damaged in strikes in March; AWS cloud services in the region remained disrupted as of the report. In April, Iran's armed forces released a video naming Stargate UAE as a potential target, including a map that two people told Reuters correctly located the site near Al Dhafra Air Base, which hosts US troops and has itself been targeted during the conflict, which began in February.

The redesign under discussion goes beyond typical data center engineering. According to Reuters' sources, officials are considering burying some facilities underground and housing the most sensitive workloads — including military data — inside mountain ranges in the emirates of Ras Al Khaimah and Fujairah, the only parts of the mostly flat, desert UAE with suitable terrain. Other measures include air defense systems capable of intercepting or jamming drones and missiles, blast-resistant concrete, and duplicated backup power and cooling systems. TheNextWeb noted that splitting a single gigawatt-scale cluster across multiple sites carries a real technical cost, since large AI training runs depend on chips being physically close together, and that neither the additional construction time nor the added cost of hardening the sites has been disclosed.

• Original design: a single 10-square-mile (26 km²) campus near Abu Dhabi
• Revised approach: a distributed network of smaller, hardened sites across the UAE
• First phase: a $30 billion, 1-gigawatt cluster, with 200 megawatts due online in 2026
• Full project target: 5 gigawatts of AI compute capacity
• Damage already sustained: two AWS data centers in the UAE and one in Bahrain, hit in March 2026

A regional pattern beyond one campus

For AI infrastructure operators outside the Gulf, the episode is a concrete illustration of a risk that had mostly been discussed in the abstract: that concentrating AI compute in a single, highly visible site turns it into a wartime target, not just an engineering and cooling challenge. Daniel Benaim, a fellow at the Middle East Institute who previously served as a US deputy assistant secretary of state, told Reuters the conflict has been an "economic earthquake" for Gulf states that had marketed themselves as safe havens for capital, and predicted that "every country in the region is going to look at what they can do" to harden similar sites. The UAE's difficulty comes as it also works to preserve access to Nvidia's most advanced chips, a privilege granted under a US agreement in exchange for curbing AI ties with China — meaning any delay or cost overrun at Stargate UAE would test not just G42 and its partners, but the broader bet that Gulf states can host the world's most advanced, and now most exposed, AI infrastructure.