As Meta and Google delay subsea cable projects through the Red Sea amid escalating security risks, Gulf nations are accelerating multibillion-dollar investments in alternative data infrastructure to underpin the region's fast-growing AI and cloud computing ambitions.

With geopolitical tensions making traditional Europe–Asia routes through the Red Sea increasingly difficult to build and maintain, Saudi Arabia, the UAE, and Qatar are channeling billions into new subsea and terrestrial fiber-optic routes designed to keep their plans to become global AI powerhouses on track.

Ooredoo's Flagship FIG Cable System

Qatar's Ooredoo Group has spent the last three years transforming itself from a conventional telecommunications operator into a digital infrastructure provider. Central to that strategy is its Fibre in the Gulf (FIG) subsea cable system, slated for completion in late 2027 and set to be the largest ever built in the GCC.

Ooredoo is investing more than $500 million in FIG, which will span nearly 2,000 kilometres and deliver planned capacity of up to 720 terabits per second—sufficient to transmit millions of gigabits of data every second.

Yet FIG's strategic value extends well beyond raw capacity. "FIG will be the first cable connecting Asia to Europe, but completely circumventing both the Suez Canal and the Bab-el-Mandeb strait and running from Oman through Iraq and Turkey into Europe," Aziz Aluthman Fakhroo, CEO of Ooredoo Group, told Fortune.

"When we launched this project 18 months ago, the Iran conflict we're facing today wasn't on the horizon. But even then, we were already seeing very strong demand for FIG. I think that the current events have reinforced that proposition."

Houthi attacks have effectively brought subsea cable construction in the Red Sea to a standstill since 2024, affecting projects from industry leaders including Google and Meta. The vulnerability is not theoretical: in early 2024, at least three subsea cables in the Red Sea were damaged, disrupting connectivity between Europe, Asia, and Africa and exposing how a single corridor's disruption can cascade across global networks.

A Concentrated Chokepoint

Often described as the world's "information highway," the Middle East serves as a critical conduit for global data connectivity. Subsea cables carry an estimated 95% or more of all intercontinental data traffic worldwide, making route diversification a strategic priority far beyond the Gulf itself. However, the flow is highly concentrated: research by the Center for Strategic and International Studies (CSIS) shows that over 90% of Europe–Asia data and telecommunications traffic passes through Egypt and the subsea cable corridors converging at the Red Sea and Suez Canal region.

"Creating these alternative routes in terms of connectivity is extremely important given that the vast majority of data flows through the Suez Canal," said Fakhroo. "There hasn't been any new capacity built in the last five to seven years due to a number of reasons, including geopolitical events. And yet, every year, these data flows increase by about 30%, so we're seeing extremely strong growth in connectivity."

Conflict-Driven Complications

Fakhroo acknowledged that the U.S.–Iran war has disrupted Ooredoo's rollout of FIG, particularly because the cable is designed to traverse the Strait of Hormuz.

"The war has added complications in terms of logistics and supply chains," he said. "Certain markets, such as Iraq, have been somewhat put on hold or delayed, but these markets are not the main drivers of our growth strategy over the next two to three years."

To keep the project advancing while parts of the network remain inaccessible due to the Strait of Hormuz situation, Ooredoo is prioritizing investment in land-based infrastructure and cable procurement. "So, we currently can't get the ship-laying cables inside Hormuz, but we're still continuing with the ground seabed surveys in other areas, and we're building out the land-based routes," Fakhroo explained.

Beyond Cables: Owning the Full Stack

Ooredoo's ambitions extend well beyond laying digital highways—it also aims to own and control them. That means investing not only in subsea cables but also in landing stations, terrestrial fibre networks, and the broader infrastructure that carries data ashore and onward.

In May, Ooredoo announced a partnership with du to land the FIG system in the UAE, while also advancing the construction of landing infrastructure and new cable landing stations in both Qatar and Iraq.

Ooredoo is additionally collaborating with Saudi Telecom Company (STC) on the Saudi Oman Network Infrastructure Corridor (Sonic), a terrestrial fiber-optic network spanning 1,931 kilometers across some of the world's most demanding desert terrain. Announced in February last year with a 24-month construction timeline, the project runs from cable landing stations in Jeddah through the primary data center clusters in Riyadh and Muscat, extending toward Oman's southeastern border. The corridor is designed to create a "Digital Bridge" across the Arabian Peninsula, bypassing both the Red Sea and the Strait of Hormuz chokepoints.

In February this year, Ooredoo reinforced its commitment to fiber as a growth engine by establishing Ooredoo Fibre Networks (OFN) as a dedicated entity to scale its subsea cable and fiber infrastructure investments—a clear signal that the company views this business as a standalone growth opportunity.

Data Center Expansion Despite Volatility

Fakhroo expressed confidence in the outlook for regional data center growth, despite ongoing volatility and recent high-profile attacks on data centers in both the UAE and Bahrain.

"As economies across the region become increasingly digital, there's a growing focus on sovereignty—sovereign cloud, sovereign AI, and sovereign data residency," he said. "And such solutions require a presence in the country where they're being sold, because the data they host cannot leave that country's borders. So, despite all the events we've seen, local demand remains very strong and is more than sufficient to drive significant growth."

In July, Qatari data center developer Meeza completed a 4MW expansion project for an unnamed "leading global hyperscaler," delivering the facility nine months ahead of schedule.

Ooredoo's own data center subsidiary, Syntys, is targeting an installed capacity of 120MW by 2030. "We set that target back in 2024 but we'll be way ahead of that by then," Fakhroo said.

National AI Compute Ambitions

The UAE, Saudi Arabia, and Qatar are collectively targeting 8–10 GW of AI compute capacity across announced projects and national initiatives. This includes the UAE's planned 5-GW campus and Saudi Arabia's HUMAIN, which is targeting 1.9 GW of compute capacity by 2030, with further expansion planned beyond that milestone. Realizing those ambitions will require not just power and processors but also the high-bandwidth, low-latency fiber links to move enormous training datasets between data centers and connect Gulf compute clusters to enterprise customers in Europe and Asia.

Both the UAE and Saudi Arabia are simultaneously racing to construct new data highways to Europe.

STC, majority-owned by the Saudi Public Investment Fund (PIF), is investing $800 million in SilkLink—a fiber optic cable network spanning 4,500 kilometers (2,800 miles) across Syria to a submarine cable landing station at Tartus on the Mediterranean, with connections to Jordan, Lebanon, and Turkey. Announced in February this year, the first phase is expected to begin within 18 to 24 months.

A week later, an Iraqi-UAE private consortium announced plans to build WorldLink, a $700 million hybrid subsea and terrestrial fiber-optic cable network running from the UAE to Iraq's Al-Faw Peninsula, then overland through Iraq and Kurdistan to Turkey. Scheduled for phased rollout over the next five years, the consortium said the cable would target hyperscalers, international carriers, and AI applications, while also aiming to ease congestion and reduce transit times compared to traditional Suez Canal routes.

This story was originally featured on Fortune.com.