The Next AI Arms Race Is About Fortifying Data Centers

The AI boom has created a massive market for data centers, but also a less celebrated one: protecting these facilities from threats. Rising anti-data center sentiment and conflicts like the war in Iran have made data centers strategic infrastructure and secondary targets after military sites. Enemies can now degrade an opponent's capabilities by hitting compute infrastructure that underpins communications, logistics, and even military planning. This reality is driving increased demand for hardened security, especially counter-drone capabilities, particularly in the Middle East where significant capacity expansion is planned. Recent drone strikes in Bahrain and the UAE caused costly disruptions for Amazon Web Services, highlighting the vulnerability. Insurance policies typically exclude damage from military conflict, leaving companies exposed. The threat includes both explosive and loitering drones that probe networks for weak spots. The concentration of valuable compute in one place, especially near active war zones, makes these facilities tempting targets. This has led to a "second wind" for the data center security sector, with advanced security measures, including drone defense, potentially costing up to 5% of construction costs. This could generate billions in revenue for security firms as global conflict accelerates.