How drone-striking datacenters changes the calculus of warfare
Billion dollar datacenters have become targets for drones costing tens of thousands, upending defense doctrines and debates about digital sovereignty.
While the world’s attention is fixed on the Strait of Hormuz, and the soaring cost to the global economy of disrupted energy supplies, another reckoning is taking place in the technology sphere.
Drones launched by Iran’s Islamic Revolutionary Guard Corps hit two datacenters in the United Arab Emirates in the early days of the US-Israel-Iran conflict, setting them on fire and knocking them offline. A third facility in Bahrain was also damaged.
Banks, ride-sharing apps, and enterprise software companies’ services went down. It was the first time that a datacenter has become a target in war.
It is unlikely to be the last.
The numbers, like the conflict, are asymmetrical. Iran’s Shahed-136 drone is a cheap, low and slow delta-wing that explodes on impact. No piloting. No sophisticated navigation. The Shahed’s genius is “economic, not technical.”
Iran manufactures them at a cost of approximately $50,000, while shooting one down with an interceptor missile can cost the Gulf states, the United States or Israel between $3 million and $12 million.
Because they are made out of simple components, Shahed drones don’t require large or sophisticated factories to build. Smaller workshops and garages are sufficient.
Iran can probably keep making Shaheds even as its ballistic missile launchers and storage facilities come under intense bombardment.
Alongside datacenters, Iran has hit the US embassies in Riyadh and Baghdad, a five-star hotel, the international airport in Dubai, regional ports, oil and gas infrastructure, and Gulf shipping as part of its bid to widen the war and impose costs on US allies across the region.
Cheap drones have changed the calculus of military offensive capabilities, and put pressure on combatants to figure out how to defend critical infrastructure in a completely new way.
Enter the datacenter dilemma. Companies in the United States invested over $74 billion in domestic construction of datacenters last year alone. The Asia-Pacific region has a combined 16.5 gigawatts (GW) of computing power planned or under construction — the energy equivalent of another metro Los Angeles or Moscow.
Thousands of new facilities are still being constructed worldwide, adding an expected 100 GW of capacity by the end of the decade, at a cost of some $1.2 to $3 trillion according to JLL.
Nearly three quarters of industry leaders (comprising 250 experts in 52 markets) viewed the sector as recession-proof, according to Turner & Townsend.
War-proof is a different question. Hostile drone strikes will push investors to weigh the costs, new threats, and potential returns on scaling inference capabilities by building new datacenters.
The boom is being fueled by expectations that huge compute clusters are needed for artificial intelligence systems that will account for an increasing share of economic value over time.
As nations come to rely on datacenters to power their economies, government services, and in some cases, national defense, the fact that they have become targets in military conflict poses a new type of resilience risk.
The calculus of warfare is changing as a result. The Middle East has already been deeply affected by this conflict, “but the magnitude and stakes” matter. “The difference will come down to the war’s duration and spread, whether trade routes remain closed, and whether investors begin to question the region’s core economics,” argue Eitan Danon and Josh Kram at Riyalpolitik, a newsletter that follows the economic story of a changing Middle East.
“It’s not surprising that Iran targeted data centers in the UAE and Bahrain. Beyond the disruptions to public and private services these strikes can cause, these data centers are highly symbolic of the Gulf states’ partnerships with US Big Tech and their investment in AI and technology as a cornerstone of their post-oil economic transformation,” Danon explained.
“The strikes are not likely to deter the ambitions of the Gulf states to be global players in AI, but will probably make corporations think twice about how to harden their defenses from drone attacks that are relatively inexpensive for Iran to mount,” Danon added.
Prolonged drone-based conflict threatens to upend the region’s economic order.
Mohammed Soliman, the author of West Asia: A New American Grand Strategy in the Middle East, told Inferences that a new doctrine for defending datacenters “starts with a reclassification that datacenters are critical national infrastructure, not commercial real estate, and they need to be defended accordingly.”
“Digital infrastructure is now a Tier-1 target in modern attrition warfare, requiring datacenters to be integrated into a nation’s multilayered air defense system.”
Size matters too. “The doctrine will depend entirely on what kind of datacenter we are talking about, what it services, who owns it, and what scale we are dealing with. A 50MW facility serving regional cloud customers is a different problem from a 500MW hyperscaler or a 5GW campus that effectively functions as national compute infrastructure,” Soliman said.
There are important lessons for the digital sovereignty debate now unfolding in Europe. The EU has spun up a “Counter-Drone Centre of Excellence” to prepare for attacks by more sophisticated and lethal drones. At the same time, many EU and member state policymakers face growing pressure to shore up digital sovereignty efforts by reducing exposure to the US and China.
The calculus is far from easy. On the one hand, the global footprint of an international hyperscaler may allow customers to migrate workloads from one part of the world that is experiencing conflict, to another that is more peaceful.
On the other, restricting national capabilities and sensitive data to a smaller number of sovereign, domestic datacenters could increase the risk of major disruptions in the event of a shooting war or a natural disaster.
All while governments try to reduce the risk that foreign powers could attack critical datacenters, gain access to sensitive data, or use policy tools to limit access to digital services in order to gain geopolitical leverage.
Events in Iran shows that prospect of digital sovereignty is becoming even more complicated — with compromises and tradeoffs between cost and effectiveness, resilience and redundancy.
The rules are being rewritten as we speak, and adaptation will be expensive at a time when costs are already rising sharply.