The next phase of warfare is already here, and it is targeting something far different than oil fields or shipping lanes.
The recent conflict with Iran has demonstrated a troubling evolution: data centers, cloud infrastructure, and the energy systems that power them are now strategic targets.
Compute has joined pipelines and ports as critical infrastructure in modern conflict.
A New Kind of Battlefield
This evolution reflects a broader shift in how wars are fought. Artificial intelligence now sits at the center of an increasingly complex, multi-domain battlefield; one doctrinally rooted in cyberspace but with cascading effects across land, maritime, air, and space domains.
What makes this domain uniquely challenging is its dual-use nature: the same infrastructure that drives commercial innovation also confers military advantage.
Data centers, cloud platforms, and the networks connecting them are no longer peripheral assets. They are core operational targets.
That shift carries profound implications for US national security. It underscores a reality Washington cannot afford to ignore: the global race for AI dominance is being contested in real time, and the Middle East, alongside the Russia-Ukraine war, is emerging as one of its most consequential battlegrounds.
The Gulf states — particularly Saudi Arabia, the United Arab Emirates, and Qatar — represent the single most important swing region in the competition between the United States and China to define the future of AI.
Flush with capital, rich in energy resources, and actively diversifying beyond hydrocarbons, these countries are investing heavily in AI infrastructure.
Compute Is the New Oil
In strategic terms, compute is becoming the new oil. Whoever supplies it will shape not only the region’s digital future, but the global balance of technological power by providing clients greater situational awareness over their own territory, while also potentially giving China a window into those same clients’ information.
Beijing understands this. Over the past several years, China has moved aggressively to embed its technology stack across the Middle East, advancing what amounts to a digital extension of its Belt and Road Initiative.
Companies like Huawei, Alibaba Cloud, and Tencent offer integrated packages of hardware, cloud services, and AI tools — often at lower cost and with fewer political conditions than their American counterparts.
These efforts are already bearing fruit. Huawei has launched cloud regions in Saudi Arabia, forged partnerships across the Gulf, and is actively marketing its Ascend AI chips to regional buyers.
Chinese firms are not merely selling products; they are building ecosystems — locking in long-term dependencies that could shape everything from commercial innovation to military interoperability and surveillance.
Beijing is also positioning itself as a more stable and predictable partner.
While US-aligned AI infrastructure has been directly targeted by Shahed drones amid the regional conflict with Iran, Chinese-backed systems have largely avoided similar strikes.
Though risks persist for Beijing-affiliated infrastructure, that contrast feeds a narrative China has carefully cultivated: technological partnership without geopolitical entanglement.
America’s Stake in the Gulf
Fortunately, the United States is not standing still. American companies such as NVIDIA, Microsoft, Google, and Amazon have made significant investments across the Gulf, from advanced chip exports to multi-billion-dollar cloud and data center projects.
These partnerships demonstrate that the United States still offers the world’s most advanced and capable AI ecosystem.
Sustaining that advantage, however, will require a more disciplined approach to chip export policy than Washington has pursued in recent years.
The overly broad export restrictions enacted by the Biden administration risked ceding precisely the markets that matter most. When US firms are locked out, Chinese competitors fill the void.
Over time, that shift can harden into long-term technological dependence, eroding American influence and weakening the industrial base that underpins US innovation.
A more targeted approach that protects the most sensitive capabilities while enabling controlled commercial engagement offers a better path forward.
A Smarter Strategy
Recent adjustments by the Trump administration have begun to reflect that reality.
By securing hundreds of billions of dollars in AI and cloud partnership deals while maintaining key restrictions on cutting-edge systems, the administration has helped ensure that the region’s AI buildout remains anchored to American technology.
These deals also sustain the revenue streams that fund continued research and development, keeping American chip manufacturers ahead of China in a competition that is, at its core, a long-term national security imperative.
If America hopes to win the AI competition in the Middle East, it must treat the region not as a peripheral theater but as a central front in a strategic contest with no clear end date.
That means deepening partnerships, expanding access to American technology under appropriate safeguards, helping partners defend their critical platforms, and ensuring that Gulf AI infrastructure is built on a US-led stack — not a Chinese one.
The information domain can and should become an instrument of enduring US-Gulf partnership.
The lesson is clear: the United States cannot secure its technological future by retreating from global markets.
The country that anchors the Gulf’s AI infrastructure will hold a decisive advantage in shaping data flows, technology standards, and operational capabilities across a region that remains central to global security.
That, in turn, will determine the balance of power in an era where compute, not just energy, defines national strength.
Sergio de la Peña, Colonel, US Army (Ret.), is the former Deputy Assistant Secretary of Defense for Western Hemisphere Affairs
The views and opinions expressed here are those of the author and do not necessarily reflect the editorial position of Military AI.
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