he tech industry is notorious for operating within its own bubble — sometimes even its own reality distortion field — but the impacts of the Iran-U.S. war are threatening to bear down on it.

Multiple factors are now in play in the conflict that could disrupt tech companies and impact the pace of AI growth:

• Iran names U.S. tech firms as targets: The official news agency of the Iranian military listed Amazon, Microsoft, Palantir, and Oracle as the "enemy's technological infrastructure" and made clear that it considers them military targets. This was connected to the U.S. threat to obliterate Iran's power plants, a stance that has since been softened.
• Critical mineral shortage disrupts chip makers: Semiconductors run the world, especially AI, and the industry is facing a critical shortage of minerals because of the conflict. A third of the world's helium comes from Qatar, and it's essential for cooling systems and circuits in producing semiconductors. The closure of the Strait of Hormuz puts the semiconductor supply chain at risk, and Iran has already struck the Qatar helium plant at Ras Laffan and taken it offline.
• Hyperscalers rethink Middle East expansion: Tech companies had been preparing to invest billions of dollars in data centers and AI factories, but the instability and uncertainty of the conflict between the U.S./Israel and Iran has put those plans in jeopardy. Iran has already attacked AWS buildings in the UAE. OpenAI, Nvidia, Oracle, and Cisco have been collaborating on a potential 5-gigawatt facility in the UAE. But a prolonged conflict could redirect this and other projects to safer havens like India, Southeast Asia, or Northern Europe.

Our Deeper View

In terms of the economic fallout, we may only be a week or two away from the conflict bringing the semiconductor industry to a halt. That will have cascading impacts across many sectors of the economy and risk triggering a global recession if the conflict becomes prolonged. More broadly, tech companies becoming military targets is evidence of how central the industry has become to nearly every aspect of modern life. The employees of tech companies in the region are now at risk, as are Iranian civilians who work at power plants. As is often the case in war, the norms and standards of conflict can get thrown out the window when leaders and countries become impatient or desperate. And tech has suddenly become a high-value target.