Oaktree-owned Pure DC pauses investment decisions in Gulf data centers
The CEO of a major data center company told CNBC that it has halted investment in AI infrastructure projects and data centers in the Middle East amid the Iran war.
The future of massive digital infrastructure plans in the Middle East has become uncertain as oil prices soar and supply chains are severely disrupted by conflict in the region.
Assets in the region have become military targets, and shortages of basic materials needed to build AI infrastructure are expected. A data center in Abu Dhabi operated by Oaktree-owned Pure DC was hit by shrapnel from an Iranian attack.
The company’s CEO, Gary Wojtaszek, told CNBC that “investment decisions on all data center opportunities have been paused.” “Until things get better, no one wants to develop new data centers and put in new GPUs.”
“No one is going to walk into a burning building, so to speak,” he said in an interview on Tuesday. “Until everything calms down, no one is going to put in new additional capital on a sufficient scale to do anything.”
The slowdown follows big spending by governments in the Middle East, as well as hyperscalers and data center developers looking to take advantage of cheap electricity and land, as Gulf countries position themselves as key players in the AI boom.
Wojtaszek said Pure DC still sees “long-term opportunity” in the Middle East, adding that long-term “planning and discussions” are ongoing around data center projects there.
Pure DC operates in the United Arab Emirates, where its Abu Dhabi data center on Yas Island was hit by shrapnel, and it also has plans to expand in Riyadh, Saudi Arabia.
In March, AWS facilities in the UAE and Bahrain were hit by Iranian drones, causing disruptions to banking, payments, corporate and consumer services.
“Although the current macro-political environment has slowed sector investment, digital demand remains unchanged,” Wojtaszek said last week.
“The region’s ambitious national visions recognize the transformation enabled by digital government, institutional modernization and a future-ready workforce.”
Data center workforce
Wojtaszek said field workers face increasing security risks as data centers become critical infrastructure, and Pure DC offers some benefits to Middle East staff.
“We’re not requiring anyone to be on site, they have to make a decision based on what’s right for them and their family… It’s a really difficult situation,” he said, adding that workers who choose to stay on site will get “additional comfort.”
Some of these benefits include location flexibility for non-essential employees who can leave the country with their families and work remotely, as well as additional welfare packages for all staff.
The data center developer is now focusing on how to operate facilities remotely with electronic means.
Data center workers are increasingly William Self, chief workforce strategist at global workforce consultancy Mercer, has previously predicted that the “dangerous wage rate” will be incorporated into wages in the future.
“You can also imagine that there’s a certain psychic burden for people who work in facilities where they know full well they could be hot targets or bad actors, which could additionally increase the types of compensation packages we’ll see to attract this population to these centers,” Self said. he said.
