Hormuz closure threatens Gulf's AI goals, warns OECD

Hormuz closure threatens Gulf's AI goals, warns OECD | AGBI
June 9, 2026
About us
Partner with AGBI
Login
|
Register
Skip navigation
Sectors
Aviation
Artificial Intelligence
Business of Sport
Construction
Cybersecurity
Defence
Economy
Energy
Entrepreneurs
Finance
Food & Drink
Gaming
Giga-projects
Health
Industry
Infrastructure
Logistics
Manufacturing
Markets
Oil & Gas
Real Estate
Retail
Sustainability
Tax
Tech
Telecoms
Tourism
Trade
Transport
Middle East
All Middle East
GCC
UAE
Saudi Arabia
Bahrain
Kuwait
Oman
Qatar
Dubai
Abu Dhabi
Turkey
Egypt
Morocco
Iraq
Jordan
Algeria
Lebanon
Libya
Opinion
All Opinion
Alex Malouf
Amena Bakr
Andrew Cunningham
Austyn Allison
Frank Kane
John Grant
Martin Keulertz
Matein Khalid
Dr Nasser Saidi
Robin Mills
Simon Chadwick
Analysis
Economic data
UAE
All GCC data
All Mena data
Bahrain
Egypt
Kuwait
Oman
Saudi Arabia
Turkey
Qatar
Topics
Blockchain
Cryptocurrency
Donald Trump
Electric vehicles
Food security
Hydrogen
IPOs
Islamic finance
M&A
Neom
Opec
Red Sea Global
Saudi Vision 2030
Water
Saudi Arabia giga-projects
Giga-projects tracker
AlUla
Amaala
Diriyah
Jeddah Central
Neom
New Murabba
Qiddiya
The Red Sea
Roshn
Rua Al Madinah
World
Africa
Asia
Europe
North America
Latin America
Companies
Interviews
People & Lifestyle
About us
Partner with AGBI
Authors
Executive Team
Login
Register with AGBI
Finance
Energy
Construction
Transport
Tech
Sport
Opinion
Analysis
Economic Data
All sections
Artificial Intelligence
Hormuz closure threatens Gulf’s AI goals, warns OECD
By
Francesca Washtell
June 7, 2026 7:43 AM
X
LinkedIn
Facebook
Copy link
Before the Iran conflict, growth in Middle East data centres was forecast to hit 63% annually during the next two years Copyright: Andriy Popov/Alamy
‘Dark scenario’ for global economy
Projects could be delayed
Physical threat to sites
A prolonged Middle East conflict could delay the Gulf’s ambitions to become a global powerhouse in artificial intelligence, the Organisation for Economic Cooperation and Development (OECD) has warned.
Countries including Saudi Arabia and the UAE are pouring billions of dollars into building data centres with the backing of sovereign wealth funds and government investments.
But failure to reach an Iran-US peace deal could scupper these plans as countries grapple with disruptions to energy supplies, trade routes and investment flows as a result of the virtual closure of the Strait of Hormuz, the OECD said in its latest Economic Outlook.
“Large-scale AI infrastructure projects, including multi-gigawatt data centres and campuses, are closely linked to sovereign wealth funds and state-backed capital,” the report said.
“Prolonged geopolitical tensions could delay or halt these projects, affecting global inference capacity expansion and its geographic distribution.”
The AI analysis came as the OECD also warned of a “dark scenario” that could grip the global economy if the Gulf energy crisis drags on into the second half of 2027.
If the flow of fossil fuels from the Gulf is disrupted until late next year, global growth would drop to 2.1 percent in 2026 and 1.8 percent in 2027, it said.
Further reading:
Talent bottleneck threatens Gulf banks’ AI push
Gulf-backed Innio jumps in latest AI-related IPO
Humain partners with Nvidia to launch robotaxis
Even if the crisis is resolved soon, global growth will fall this year to 2.8 percent from 3.4 percent in 2025.
AI investment has soared worldwide and become a pillar of diversification efforts for countries keen to reduce their dependence on fossil fuel exports.
There are a slew of projects in the pipeline throughout the Gulf, but several major projects are located in Saudi Arabia and the UAE.
Saudi Arabia has used its Vision 2030 economic plan to position itself as a global AI hub. Its projects include the $2.7 billion Hexagon Data Centre in Riyadh, which is set to be the world’s largest government-owned facility, and a vast cloud data centre region with Microsoft Azure known as Saudi Arabia East that is due to launch later this year.
Last year, the kingdom’s futuristic giga-project Neom signed a $5 billion deal to develop what it describes as the world’s first sustainable data centre . The first phase has a capacity of 1.5 gigawatts (GW) and will be operational from 2028.
The UAE’s initiatives include Stargate UAE with ChatGPT creator OpenAI, which will build a 1GW supercomputing campus in Abu Dhabi.
A gigawatt of energy is enough to power about 750,000 homes, but major data centres may require this amount of dedicated, continuous energy to run their day-to-day operations.
Gulf countries are ramping up investments in renewables to help power ever-expanding grids, in part to service energy-guzzling data centres.
There are a number of ways in which a longer conflict between the US, Israel and Iran could cause problems for technology projects worldwide, the OECD said.
Higher energy prices will increase operating costs for data centres and disruption to exported commodities such as helium, used in manufacturing, could have a knock-on effect on the production of semiconductors and other hardware.
But Gulf Cooperation Council member states – the UAE, Oman, Bahrain, Qatar, Saudi Arabia and Kuwait — are also contending with spending vast sums to rebuild energy facilities damaged during the Iran war .
Analysts say the repair bills could also impact overseas energy investments .
Growth in Middle East data centres was forecast to hit 63 percent annually during the next two years, driven by Saudi Arabia and the UAE, according to Knight Frank research published before the war broke out on February 28.
The OECD added that there remains a physical threat to AI and data centre sites , after drone attacks on web services facilities in the UAE and Bahrain disrupted regional cloud services in March.
Register now: It’s easy and free
AGBI registered members can access even more of our unique analysis and perspective on business and economics in the Middle East.
Why sign uP
Exclusive weekly email from our editor-in-chief
Personalised weekly emails for your preferred industry sectors
Read and download our insight packed white papers
Access to our mobile app
Prioritised access to live events
Register for free
Already registered? Sign in
I’ll register later
Advertisement
Related Content:
Data centres , Iran-Israel conflict
Artificial Intelligence , Tech
Markets
Gulf-backed Innio jumps in latest AI-related IPO
June 5, 2026
Analysis
Tech
Gulf cloud infrastructure has a ‘target on its back’
May 15, 2026
Artificial Intelligence
Amazon doubles down on AI with $5bn Anthropic bet
April 21, 2026
Analysis
Tech
Qatar’s Ooredoo creates dedicated cable spin-off OFN
March 30, 2026
Trending
Oil prices fall after Iran and Israel suspend attacks
June 9, 2026
Riyadh Air brings forward debut London flight
June 9, 2026
Lebanon inaugurates second international airport
June 8, 2026
Hormuz closure threatens Gulf’s AI goals, warns OECD
June 7, 2026
Egypt targets $4bn from global bond markets
June 8, 2026
Latest Articles
Aviation
Iraq lost $15,000 per hour due to airspace closure
June 9, 2026
Renewable Energy
Egypt awards Red Sea wind farm contract to Alcazar Energy
June 9, 2026
Transport
Saudi Arabia awards contract to expand freight railway network
June 9, 2026
Oil & Gas
Oil prices fall after Iran and Israel suspend attacks
June 9, 2026
Finance
Oman’s Duqm special economic zone draws $7.5bn investment
June 9, 2026
Analysis
Real Estate
Dubai property rally fades as buyers secure discounts
June 9, 2026
Analysis
People & Lifestyle
Long-term view behind demand for Oman’s golden visa
June 9, 2026
Analysis
Employment
Corporate relocations to the Gulf retain appeal
June 9, 2026
Aviation
Riyadh Air brings forward debut London flight
June 9, 2026
Aviation
No cuts to Turkish Airlines’ schedule, says chairman
June 8, 2026
Markets
Egypt targets $4bn from global bond markets
June 8, 2026
Construction
Jordan hires Dubai company to build logistics city
June 8, 2026
Sign up to our newslett…

Text scraped from the landing page for research purposes. © respective owners. This text is sourced from the advertiser's public landing page; for removal, contact dmca@luba.media.