Overview
The closure of the Strait of Hormuz—a chokepoint for 40% of the world’s oil and other maritime trade—has rocked the global economy. Below the maritime skirmishes, another crucial chokepoint is at risk: subsea fiber optic cables in the Gulf. Subsea cable networks globally carry an estimated 95% of all international data traffic, and in the Gulf are concentrated in just a few routes through the Red Sea and the Strait of Hormuz. Sitting at the intersection of Europe, Asia, and Africa, damage to these networks risks connectivity losses in one of the world’s most important internet traffic zones. Perhaps even more pressingly for the region, damage to existing networks threatens Gulf economies’ moonshot efforts to become the AI capitals of the world.
Efforts to expand terrestrial cable networks and increase reliance on satellites could mitigate the disruptive power of the Strait cable chokepoint, as well as create upside risks for host countries and global telecoms. But the persistence of security risks on sea and on land, alongside the growing awareness of subsea fiber optic cables as a national security concern, will build in risks and uncertainty for global internet traffic and regional AI ambitions.
The fiber optic cable network in the region is extensive. Five commercial submarine cable systems transit through the Strait of Hormuz. These include systems connecting Asia to Africa to Europe (AAE-1) and Southeast Asia to the Middle East to Western Europe (SEA-ME-WE 5). Another two systems—FALCON, which connects India and Sri Lanka to Gulf states, Sudan, and Egypt, and the Gulf Bridge International Cable System (GBI), which connects all Gulf countries—also run through Iranian territorial waters. Cables in the Strait carry just 1% of global internet traffic, but their connection to the broader corridor connecting the region to Africa and Europe via the Gulf of Oman, the Red Sea, and the Mediterranean is an even more consequential chokepoint. Approximately 90% of communications between Europe and Asia and 17% of global data traffic pass through the Bab al-Mandeb Strait every day.
Conflict, and Iranian Leverage, Risks Connectivity
The Iran war has already threatened the region’s subsea cable infrastructure. War risks have already halted work on a Persian Gulf segment of the 2Africa network. Work stoppage is likely to be protracted, even if a peace deal is struck, as evidenced by the delayed construction of new undersea cables in the Red Sea since 2024 due to potential Houthi attacks. The risk of inadvertent damage from skirmishes or mines in the Strait of Hormuz is the biggest threat today; per the International Cable Protection Committee (ICPC), out of around 200 instances of cable damage each year, only about one percent was intentional.
Even more concerningly, Iran is increasingly floating intentional plans to damage or control subsea cables. In early May, IRGC-linked outlets Tasnim and Fars argued that Gulf subsea cables fall in Iran’s sovereign territory. Tasnim called for the IRGC to charge foreign companies initial licensing and annual renewal fees, require major technology companies to operate under Iranian law, and give Iranian companies exclusive control over maintenance and repair of the cables. Fars echoed the statement and noted that a disruption of just a few days could cause tens to hundreds of millions of dollars in damage to the regional and global economy—an implicit acknowledgement of Iran’s immense leverage if it chose to attack.
The prospect of asserting administrative control over the cable network mirrors Iranian efforts to control the flow of traffic through the Strait of Hormuz. It is underpinned by Iran’s newly expanded conception of its own influence over the waterway and subsequent assertions of expanded sovereignty there. An attack or attempt to control traffic would have risks for Iran as well: Iran and its allies are also reliant on subsea cables for connectivity, and its Houthi proxies receive rents from landing rights in Yemen. Still, Iran’s long (recently lifted) internet blackout demonstrates its ability to go without connectivity for extended periods of time. Further, its ability to endure (thus far) the complete closure of the Strait illustrates Tehran’s broad willingness to endure economic hardship if its rivals are suffering worse.
Risks of Disruption: Connectivity and the AI Boom
Regional powers are exposed to varying extents. Strait-locked Qatar, Bahrain, and Kuwait have limited cable diversity and would be the most immediately impacted. The UAE and Saudi Arabia have more redundancy—the UAE via terrestrial connections in neighboring countries and subsea cables along the Gulf of Oman, and Saudi Arabia via subsea cables in the Red Sea. Disruptions in Strait networks would effectively cut off some Gulf countries from internet access, as well as overload back-up terrestrial connections and other submarine cables, thereby slowing or cutting off internet access in the Middle East and Asia. February 2024 damages to subsea cables in the Red Sea (a result of anchor dragging by a vessel damaged by Houthi attacks) affected a quarter of data traffic between Asia and Europe. While no country was completely cut off, the economic impact of significantly reduced capacity reached an estimated $3.5 billion. Even limited disruptions could be devastating: an Emirati research center estimates that just a 24-hour halt to service to India from damaged cables in the Strait of Hormuz could cost its internet services sector $920 million.
In addition to threatening basic connectivity, risks to the integrity and expansion of subsea cable infrastructure could dampen Gulf ambitions to become global capitals of AI deployment. Saudi Arabia, the UAE, and Qatar have centered AI development in their generational efforts to diversify their economies away from dependence on oil exports. The region spent $8.4 billion on domestic AI development in 2025, with spending rapidly increasing: the UAE spent $355 million on hardware alone in 2025, and is expected to hit $892 million by 2029. Saudi Arabia spent $378 million and is expected to hit $1.09 billion. The previous figure does not capture staggering sovereign wealth fund-backed investment in foreign tech companies: Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority, and the UAE’s Abu Dhabi Investment Authority allocated $165 billion across 53 global deals in 2025.
The ultimate goal for both Saudi Arabia and the UAE is to export computing capacity. Both Saudi Arabia and the UAE are currently developing what will become the largest data centers in the world, by different metrics (the Kingdom’s Hexagon data center will be the world’s largest government data center, at 30 million square feet and 480 megawatts, while the UAE’s Stargate campus will contend for the largest center, period, with a five-gigawatt capacity). The ability to export that compute reliably is completely dependent on the integrity of the Gulf subsea cable network—both for basic connectivity and consumer confidence.
New Strategies
Regional capitals are already looking to diversify their connectivity to mitigate chokepoint risk in the Strait of Hormuz and the Red Sea. Terrestrial cables are the most popular alternative. Saudi Arabia’s telecoms company, Stc Group, is investing $800 million in reviving the Syria link of the JADI route (named after Jeddah, Amman, Damascus, and Istanbul), which was severed during the Syrian civil war, and renaming it SilkLink. A consortium of Iraqi and Emirati companies is pledging $700 million to construct the WorldLink cable, which will travel underwater in the Strait of Hormuz from the UAE to Iraq, and then transition to land-based cables into Turkey (omitting Red Sea routes to reach Europe). Terrestrial cables can support a higher capacity of data, about a maximum of 144 fiber pairs, compared to the 16-24 typical in today’s subsea cables. But overland cables bring with them higher construction costs, multinational regulatory fragmentation, and human-caused maintenance costs. They also mitigate geopolitical risk by reducing reliance on one chokepoint, but do not remove it—Syria, Iraq, and other jurisdictions are still unstable to varying degrees, and terrestrial cables are vulnerable to sabotage or attack.
Satellite connectivity is a partial alternative. Low Earth orbit (LEO) satellites are well insulated from tampering, but cannot match the data rates of undersea or terrestrial cables, which carry much more data at much lower latency. The 2Africa cable, construction on which is currently halted in the Strait of Hormuz, is designed to carry up to 21 terabits, roughly equivalent to one million LEO connections, in each of its 16 fiber optic pairs. LEOs are a good alternative for individual households, but not for government use, let alone fueling a whole-of-government AI push.
The Global and Regional Impact
Threats to cable networks in the Gulf pose significant risks for regional and global business, as well as regional economic transformation ambitions. The risks transcend discrete disruptions: Iranian threats highlight the extent to which subsea cables can become a geopolitical target. An example includes Taiwan, which alleges that its crucial undersea cables have been damaged 36 times by outside forces between 2019 and 2023. Starting in 2024, Finland and Estonia have accused Russia of deliberately sabotaging undersea cables in the Baltic Sea. Now, Iran’s attempt to assert control over the Strait of Hormuz cable network mirrors its newfound ability to shut down the Strait of Hormuz—also a geopolitical novelty that will have permanent impacts on the future of the Strait and the global economy.
Risks to the Gulf’s AI boom also challenge a core assumption driving the buildout there: that AI is more scalable, modular, and flexible than hydrocarbons, and less vulnerable to geopolitical and market shocks. It remains true that oil markets are more exposed. But recent disruptions and threats of hostile control could put at risk a core tenet of Gulf economic diversification, which they consider an existential project. Downside risks for Gulf capitals and foreign partners are pronounced if conflict means prolonged suspension of construction, as capacity remains lowered and consumer confidence dims. However, upside risks are present in the construction of alternative fiber optic routes.
