Amazon (AMZN) shares climbed 3.68%, gaining $7.87 in extended trading, even as investors processed reports of significant disruptions affecting its cloud computing division.
Amazon Web Services faces a critical challenge maintaining operational continuity in the Middle East following drone attacks that impacted facilities in Bahrain and the United Arab Emirates. These incidents stem from the intensifying Iran conflict that reached new levels in February.
At Tuesday’s HumanX conference held in San Francisco, AWS CEO Matt Garman spoke candidly about the crisis. “It’s a really difficult situation, and we’re working incredibly hard,” he stated to CNBC. “We have teams, 24/7, working to make sure that we can keep our infrastructure up for our customers in that region.”
Multiple cloud offerings throughout both the Bahrain and UAE locations remain unavailable, as reflected on AWS’s public status dashboard. Iran’s Revolutionary Guard Navy announced last week that it deliberately struck Amazon’s Bahrain data center operations. While AWS refused to address that specific claim, the company referenced a prior statement acknowledging that its Bahrain location “has been disrupted as a result of the ongoing conflict.”
Restoration efforts are proving complex and time-intensive. AWS established its Bahrain presence in 2019 and followed with its UAE location in 2022 — both facilities were designed to meet expanding cloud infrastructure requirements throughout the Middle East, serving government entities and banking institutions alike.
The extensive nature of these outages creates substantial challenges for corporate clients who selected these regions specifically for data sovereignty compliance. Numerous organizations maintain Middle East operations because local laws mandate that data remain within territorial boundaries — redirecting workloads to European or Asian regions often violates regulatory requirements.
The military confrontation is driving up operational expenses. Regional energy costs have surged since hostilities commenced in February. Cloud facilities, particularly those supporting artificial intelligence computing tasks, consume massive amounts of electricity. Helium — an essential component in chip production — has become increasingly scarce. Qatar, positioned adjacent to the Strait of Hormuz, supplies over one-third of global helium production, and transportation through the strait faces mounting restrictions.
President Trump issued warnings Monday about potential strikes against civilian targets if Iran fails to reopen the Strait of Hormuz, triggering sharp increases in crude oil valuations.
Notwithstanding current difficulties, Garman expressed confidence in the region’s future prospects.
“There’s a fantastic entrepreneurial spirit,” he remarked. “There’s a willingness to invest. And so our and my excitement about investing long term in that region is just as strong as it’s ever been.”
Google, Microsoft, and Oracle maintain existing facilities or are constructing new data centers throughout the Middle East. Each provider confronts identical concerns regarding service reliability when physical assets face military threats.
An AWS representative acknowledged the Bahrain disruption but provided no estimated timeframe for complete service restoration. The company’s operational status dashboard continued displaying numerous unavailable services across both Bahrain and UAE territories as of Tuesday afternoon.
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