Iran War: Amazon Hit by Data Center Targets, Recovery System 'Non-existent'; Lee Jae-myung's 'Bottleneck Economy'
It has been revealed that Amazon suffered a hit and server access was blocked due to targeted attacks on its data centers during the Iran War, yet it had absolutely no recovery system in place.
The New York Times reported that the "bottleneck" exploitation tactics targeting data centers and capital-intensive tech companies—which are becoming new targets for attacks—have become clearly evident following the outbreak of the Iran War in the Persian Gulf, which has rapidly transformed into a massive investment destination for U.S. tech firms; in Asia, tech companies in Taiwan and South Korea have emerged as new targets.
The Lee Jae-myung administration announced a strategy for South Korea to seize "bottlenecks" in areas such as AI to sustainably boost its stock prices.
The Iran War has transformed the core advantages of the AI race supported by the U.S. administration—which were part of the Trump administration's strategy to mitigate geopolitical risks by brokering deals between U.S. tech giants and Gulf states and supporting expanded fund investments to enable tech companies to build critical infrastructure in one of the world's most volatile regions—into maximum risks due to the war triggered by President Trump. Amazon built its first data center in Bahrain in the Persian Gulf in 2019, but the situation was thrown into disarray after Iranian drones damaged the Amazon data center in Bahrain on March 1 and struck two units in the UAE, where it expanded in 2022; many customers who rely on data centers for computing power remain uncertain, the NYT reported on the 12th.
The NYT stated, “This week, Iran threatened a wide-ranging attack on the ‘enemy’s technological infrastructure,’ targeting seven U.S. tech companies including Amazon, Microsoft, Google, Palantir, Nvidia, IBM, and Oracle.” It added, “Iran’s new Supreme Leader, Mojtaba Khamenei, expressed additional concern on the 12th with a vague warning that ‘the enemy will open another front in which they have little experience.’”
U.S. tech companies have turned the Persian Gulf region in the Middle East into a hub for building data centers necessary to create and deliver artificial intelligence software, viewing it as a safe haven for investment, cheap energy, and gapped regulations. U.S. companies such as Google, Microsoft, and OpenAI have flocked to the region due to its growing economy and convenient online transmission connections to Africa and Europe.
According to research firm IDC, total spending on consumer and business technology across the Middle East surged to approximately $65 billion last year from $36 billion in 2020, while technology spending on data centers and cloud services reached $895 million, a 75% increase last year.
Steffen Hertog, a Gulf economy expert and professor at the London School of Political Studies (LSE), told the NYT, "The energy sector is far more experienced with traditional geopolitical risks than the technology sector," adding that "most non-energy investors in the Gulf region have currently underestimated pre-war risks, including U.S. tech companies."
Many companies in the region lost network access after an Amazon data center was damaged by an Iranian drone. Simon Williams, a former Amazon employee and current executive at Dubai-based AI firm Atelic AI, told the NYT, "They fainted. We lost all access to the servers, and it had a significant impact on our business."
While Williams remains optimistic that the region will remain a hub for technology investment, he was unable to contact Amazon representatives and successfully access critical data stored in the company's cloud.
He described the situation as "like a black box," stating, "They did not have the best disaster recovery systems."
Amazon has suggested that customers in the Middle East move their workloads to data centers in other regions.
In a statement, Amazon said the company is "adjusting operations in response to changing circumstances, including temporary interruptions if necessary."
Google stated that it is monitoring the situation and that "our focus is on the safety and well-being of employees in the region."
Microsoft declined to comment. Dave Komendat, former Chief Security Officer at Boeing, told the NYT, “Because data centers are a new form of critical infrastructure, they become attractive targets in conflicts,” adding that “since Amazon’s data centers were attacked, companies will consider security risks more carefully before construction.”
Komendat, currently a partner at the security consulting firm Coperant Security Advisors, said, “This incident is a low-frequency, high-impact event,” adding, “It might not happen again, but it could happen ten more times.”
The NYT stated, “These issues demonstrate that U.S. tech giants are occupying a central position in geopolitical conflicts and pushing core technological capabilities into areas where they can become ‘bottlenecks,’” noting that “the escalating effects of a war with Iran are expected to deal a blow to the tech industry.”
The NYT further noted, “This includes supply chain disruptions, soaring natural gas prices needed for data centers, and rising prices for raw materials such as plastics and aluminum essential for manufacturing electronic components.” Strategic International, a research and policy think tank, stated in a recent report that "the real weapons are not drones," adding that they are "canceled insurance, diverted oil tankers, and investors pausing."
Technological vulnerabilities are clearly evident in other parts of the world as well. The New York Times reported, “China controls a significant portion of global hardware manufacturing, and in Taiwan, which China has threatened to occupy by force, a single company called TSMC produces most of the world’s advanced microchips,” adding, “And South Korean factories within artillery range of North Korea produce a significant portion of the world’s memory chips.”
Xiaomeng Lu, a director at the Eurasia Group, a risk management consulting firm that studies the interaction between new technology and geopolitics, told the NYT, “A war with Iran will deal a blow to Gulf states’ efforts to attract major tech companies, particularly to the UAE, which is adjacent to Iran,” noting that “their ambitions were built on the premise of geopolitical stability.”
In an announcement regarding further stock price gains on the 5th, Policy Chief Kim Yong-bum stated that the chaebol companies heavily supported by the Lee Jae-myung administration “hold global industrial bottlenecks,” but in reality, it appears to be an exposure of the vulnerability of the Korean economy due to temporary stock price volatility while it is “stuck in supply chain bottlenecks.”
He wrote on Facebook, “Republic of Korea Inc. is not getting expensive now, but for decades. “We are in the process of shedding the shackles of undervaluation one by one,” and “AI memory, LNG carriers, ultra-high voltage power equipment, defense.” Regarding the four industries characterized by high technological barriers and supplier restrictions, Korea is described as “a unique nation that has simultaneously grasped several key bottlenecks of the global industry,” and it revealed “additional stock price increases” resulting from “shareholder activism.”
The “four industries” that Chief Kim claimed to have “grabbed” these bottlenecks were immediately identified by the Trump administration as having overcapacity and became targets of the Section 301 investigation.
The U.S. Trade Representative (USTR) specifically identified “electronic equipment, automobiles, auto parts, machinery, steel, and shipbuilding” as targets for investigation into evidence of Korean overcapacity, stating that additional tariffs would be imposed on the unfair trade surplus.
Following the signing of the “150 Trillion Won AI Fund” agreement with BlackRock, the Lee Jae-myung administration announced a “100 Trillion Won Stock Market Support Fund” for the Iran war.
BlackRock is the de facto controlling entity, serving as the second-largest shareholder in almost all of the companies, including Samsung Electronics, SK Hynix, Kookmin Bank, Shinhan Bank, Hanwha Aerobics, and POSCO.
As a strategy to boost domestic stock prices, the Lee Jae-myung administration [aimed to maximize] domestic... The U.S. private equity funds attracted have grown rapidly over the past decade into a $2 trillion private credit industry.
On the 5th, under the title "Korea Inc., Time for Re-evaluation," Policy Chief Kim stated, "Korea Inc. is not becoming expensive right now, but is in the process of shedding the shackles of undervaluation that have been imposed on it for decades, one by one." He added, "The global economy is currently on an infrastructure investment cycle, driven by AI data centers, power grid expansion, increased military spending, and energy transport infrastructure. SK Hynix and Samsung Electronics virtually dominate the HBM market, a core component of the AI era. Korean shipyards have seized control of the LNG carrier market, a key element of energy infrastructure, and the order backlogs of HD Hyundai Heavy Industries and Samsung Heavy Industries have already filled several years' worth."
Chief Kim continued, "HD Hyundai Electric and Hyosung Heavy Industries are irreplaceable suppliers in power infrastructure investment as well. In the defense sector, Hanwha Aerospace and Hyundai Rotem are also rapidly expanding their presence in the global market."
Chief Kim further stated, "AI memory, LNG carriers, ultra-high voltage power equipment, defense." Regarding the "Fourth Industry," he stated that "Korea is an unrivaled nation that has simultaneously grasped several key bottlenecks of global industry," and regarding the Korean stock market, he predicted "further stock price increases," noting that "internally, increased dividends, share buybacks, and growing shareholder activism are driving corporate governance reform in earnest; while it is just the beginning, the direction is clear."
Xiaomeng Lu, a director at the Eurasia Group, said, "The scale of the war's ultimate impact may depend in part on how it is resolved." He added, "If the war brings about a new Iranian leadership that is less aggressive in confronting the U.S. and Israel, it could bring more stability and investment; however, if the Iranian government maintains power despite being weakened, it could lead to the risk of further chaos and conflict in the coming years."
He continued, "The passage of time is important," noting, "If the war ends within a month, people will forget about it, but if it continues for months, we will be in a completely different realm."
See <Lee Jae-myung Private Equity Fund BlackRock Repayments Surge, Stock Price Plunges, UK Mortgage Firm 'Collapses', March 2026 Date of the 8th>