The war with Iran has driven out foreigners, snarled supply chains, and destroyed local infrastructure in the Persian Gulf, where data centers in the UAE were some of the first targets of Iranian drones. Last month, the Trump administration removed all restrictions on the sale of advanced AI chips, along with other sensitive technology and military equipment, to the Emirati government and its national AI champion, G42. In May 2025, Trump announced deals with Gulf states to boost their AI ambitions, approving construction of some of the largest AI data centers in the world in the UAE and Saudi Arabia, with exports conditioned on “robust” security measures. The administration struggled to implement the deals, failing to process chip export licenses on time, and negotiations stalled over security requirements and investment commitments. In February, Trump’s military campaign against Iran put the business model behind the Gulf AI deals in jeopardy, as foreign workers left, regional ports were disrupted, and insurance costs soared. Iran bombed Amazon’s data centers in the UAE and Bahrain and threatened additional strikes on OpenAI’s Stargate UAE. Months after the outbreak of fighting, Amazon’s Middle East servers are still offline. On July 10, the administration removed all restrictions on the sale of advanced chips and other sensitive technology to the Emirati government.