The Gulf Cooperation Council's push into artificial intelligence is driving a parallel infrastructure race, as Gulf countries and telecommunications firms seek not only to build sufficient computing capacity but also to secure control over the fibre and subsea cable networks that carry the resulting data traffic. Subsea cables are the backbone of global internet infrastructure, carrying the vast majority of all intercontinental data, making their routing a matter of national and economic security.

Currently, more than 90% of Europe–Asia data and telecommunications traffic flows through Egypt and the subsea cable corridors converging around the Red Sea and Suez Canal region, according to a CSIS analysis. The vulnerability of this chokepoint was underscored in early 2024, when multiple subsea cables in the Red Sea were damaged, disrupting communications across the Europe–Asia corridor. With geopolitical instability escalating, the construction of alternative routes has become a strategic imperative.

The UAE, Saudi Arabia, and Qatar are all racing to develop these alternative pathways, positioning themselves not only as data transit hubs between Europe and Asia but also as architects of the digital sovereignty that comes with controlling those pathways. Qatari telecom operator Ooredoo's Fibre in the Gulf (FIG) system is on track to become the largest subsea cable system ever built in the GCC. Scheduled for completion in late 2027, the $500 million project will span nearly 2,000 kilometers, connecting all six GCC member states as well as Iraq, while bypassing both the Suez Canal and the Bab-el-Mandeb strait entirely.

Ooredoo Group CEO Aziz Aluthman Fakhroo said that the Iran war had "reinforced the proposition" of FIG.

However, the project faces significant logistical hurdles. A key section of FIG is set to pass through the Strait of Hormuz, and Fakhroo acknowledged that "we currently can't get the cable-laying ships inside Hormuz."

A broader question looms over the long term: the extent to which the current conflict and its aftermath may threaten the viability of the digital infrastructure being constructed across and beyond the Gulf region. The outcome could determine whether the Gulf cements its role as a reliable digital corridor or whether its own waterways become the next chokepoint.

Separately, Ooredoo has partnered with Nvidia and Nokia to launch a multi-billion-dollar AI compute and neo-cloud platform in Indonesia. For Ooredoo, the move diversifies the group's geographic footprint beyond its core Middle Eastern markets while deepening its exposure to Southeast Asia, where AI adoption is outpacing the global average.

In other Gulf developments covered this week, a Dubai-based cryptocurrency exchange was hit with U.S. sanctions over an alleged $4 billion Iran network. UAE non-oil activity rose to a four-month high, and ADNOC Logistics & Services reported that profits quadrupled, prompting another upward revision to its outlook.

This story was originally featured on Fortune.com.