For years, the cloud has been marketed as something weightless, a service that lives everywhere and nowhere. The reality is far more physical. Every AI model, banking app and streaming service depends on buildings full of servers, connected by cables and powered by electricity grids. Iranian strikes on data centers in the Gulf have now forced data center security onto the geopolitical agenda, showing that this infrastructure has become a strategic target in modern conflict.
In a recent commentary, Soňa Muzikárová, a former economist at the European Central Bank, argues that the attacks carry an important lesson for Europe. The continent’s digital infrastructure is fragmented and heavily dependent on foreign providers, and the episode raises difficult questions about its resilience, security and sovereignty.
From Utility to Strategic Asset
Data centers have quietly become as important to modern economies as ports, power stations and pipelines. Payments, logistics, healthcare records, government services and corporate operations all run through them. The rapid spread of artificial intelligence has made them even more critical, because training and running large models requires enormous concentrations of computing power and energy.
That concentration creates vulnerability. Infrastructure that once seemed purely commercial now looks like a legitimate target in the eyes of hostile states. Physical attacks, sabotage and cyber intrusions can all disrupt services far beyond the location of a single facility, because cloud systems link users and businesses across borders.
Governments have been slow to recognise this shift. Many countries classify energy grids, telecommunications networks and financial market infrastructure as critical assets that require special protection, but commercial data centers have often been treated as ordinary property. That gap is narrowing as officials realise that an outage at a major cloud facility can halt payments, disrupt hospitals and paralyse public services in a matter of hours.
Why the Gulf Matters to the Global Cloud
Gulf states have invested heavily in becoming digital and AI hubs, using their capital and energy resources to attract major technology companies and build large computing facilities. That ambition has made the region an increasingly important node in global cloud networks. The Gulf also sits close to key routes for subsea internet cables linking Europe, Asia and Africa.
The strikes show that the same geography that makes a location attractive for investment can also expose it to regional conflict. For companies and governments that rely on services hosted there, the risk is no longer theoretical. Investors in digital infrastructure may need to price geopolitical exposure in the way energy investors have long done.
Europe’s Data Center Security Dilemma
For Europe, the lesson is uncomfortable. A large share of European cloud computing is provided by a small number of US hyperscalers, notably Amazon Web Services, Microsoft Azure and Google Cloud. European alternatives exist but remain small by comparison. This dependence raises concerns not only about physical attacks, but also about legal jurisdiction, access to data and the leverage that foreign governments could exert in a crisis.
Europe’s digital infrastructure is also split along national lines, with differing rules, energy markets and investment priorities. That fragmentation makes it harder to build the scale needed to compete, and harder to coordinate a joint response to threats. Strengthening data center security across the bloc requires decisions about where facilities are located, how they are protected and who controls them.
Cables, Power and Hidden Weak Points
Data centers are only one part of the picture. The global internet depends on subsea cables that carry the vast majority of international data traffic. In recent years, damage to cables in the Red Sea and the Baltic Sea has highlighted how exposed these links are. Repairing them can take weeks, and alternative routes are not always available.
Power is another weak point. Large data centers consume huge amounts of electricity, and their growth is putting pressure on grids in several European countries. A facility that is physically secure can still fail if the energy supply is disrupted, whether by attack, extreme weather or shortages. Resilience therefore depends on the wider system, not just the building itself.
The Push for Digital Sovereignty
The EU has already moved to address some of these issues. Initiatives on cybersecurity, data governance and resilience of critical infrastructure aim to set common standards, while the push for ‘digital sovereignty’ reflects a desire to reduce dependence on non-European providers. Efforts to build European cloud and AI capacity, including public investment in computing infrastructure, are part of the same strategy.
Yet sovereignty comes at a cost. Building domestic capacity at scale is expensive, and European firms struggle to match the investment budgets of US technology giants. Policymakers must balance the benefits of openness and access to leading technology against the risks of dependence. As Muzikárová’s argument in Soňa Muzikárová’s commentary in World Finance suggests, the Gulf attacks make that balance harder to ignore.
What Businesses and Investors Should Consider
For companies, the practical response is to treat the location of their data and computing as a risk management decision, not only a cost decision. Spreading workloads across regions and providers, testing backup arrangements and understanding which jurisdictions host critical systems can reduce exposure. Financial institutions in particular face growing regulatory scrutiny over their reliance on third-party technology providers.
For investors, digital infrastructure has been one of the strongest growth themes of the AI boom. The new risk environment does not undermine that demand, but it may change where capital flows, favouring locations seen as politically stable, well connected and energy secure. Insurers, too, are likely to look more closely at how war and political violence clauses apply to digital assets, which could raise costs for operators in higher-risk regions. Over time, strong data center security credentials may become a selling point in their own right, much as reliability and uptime are today.
Conclusion
The strikes on Gulf facilities mark a turning point in how the world thinks about the cloud. Digital infrastructure is now part of the strategic map, alongside energy and transport. For Europe, improving data center security means tackling fragmentation, reducing dependencies and investing in resilient networks before the next crisis tests them.
