After the Iran war, what’s next for tech?

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The past week has seen some progress, albeit uneasy and stilted, being made towards ending the Iran war.

A two-week ceasefire was agreed on Wednesday, and while it looks fragile, hopes of the conflict approaching a close are prompting analysts to look ahead and assess its longer-term impact on the global tech sector.

Exports of helium, a key material in chipmaking and other manufacturing processes, have already been significantly curtailed by the fighting, and some European companies have faced delays to semiconductor deliveries from Asia due to flight path disruption. Experts have also warned a prolonged conflict would throw uncertainty over future data center and AI infrastructure projects in the region.

Now, analysts tell me that a month-and-a-half of conflict in the Middle East has damaged its reputation as a place to invest and could see some backers look to put cash elsewhere in the world.

Local investors with deep pockets could help bolster tech projects in the region, though, and longer-term it still boasts attractive conditions for international tech companies and investors, not least due to its cheap energy and availability of land.

The conflict is likely to weigh on near-term investor confidence in the region, Michael Field, chief equity strategist at Morningstar, said.

“For many countries, it has been a reminder of the need to prioritise national security, which will reduce cross-border investment.”

AI data center builds could also slip down the priority list for countries directly affected by the conflict, Simon Lapthorne, senior research analyst at Rathbones, told me.

“Wars inevitably increase uncertainty, hitting confidence and investment decisions well beyond the region itself,” he said.

But the impact on tech projects in the Gulf is more about timing than demand disappearing altogether, Lapthorne added.

Attacks on data centers in the Middle East will make it harder for countries to become major AI centers running workloads from customers in other regions, but AI demand within the region should continue, Ian Fogg, tech industry analyst at CSS Insight, said.

“Business cases for AI investment will likely narrow to focus on AI workloads that originate in the region and benefit consumers and businesses in the GCC area,” he added.

While Mehdi Paryavi, CEO of think tank the International Data Center Authority, told me he expects some companies to diversify investments towards other regions like Europe, Latin American and Asia-Pacific, he added that the “reality is that the Middle East region is too rich in resources to be ignored.”

The huge spending power of often state-backed local investors in the region will also likely persist.

“I would expect local sovereign wealth funds to continue to commit to capital expenditure projects within the region, and these will be supportive,” said Paul Markham, head of global equities at GAM Investments.

Outside of the Middle East, repercussions from the conflict are likely to still be felt in the tech sector for some time.

“We are yet to see the full impact of higher energy prices on the global economy because of economic lags,” said CSS Insight’s Fogg. Energy price rises will likely affect consumer demand for technology products as disposable spending is impacted.

Data center operators, which see significant spending each year go towards energy, could also be hit by price hikes.

Others point to continued fallout from the helium shortage as a worrying trend.

“Helium isn’t a major cost driver, but any supply disruption could quickly become a constraint on chip production, with knock‑on effects across a huge range of industries,” said Lapthorne.

For now though, as the U.S., Israel and Iran continue to struggle to find common ground, industry watchers can only speculate and hope the conflict comes to a swift close.

Markets will likely remain volatile until a definitive resolution is found. Only time will tell when or how that might happen. 

A federal appeals court in Washington, D.C. on Wednesday denied Anthropic’s request to temporarily block the Department of Defense’s blacklisting of the AI company, as a lawsuit challenging that sanction plays out.

Meta debuted a new major AI model on Wednesday, its first since the costly hiring of Scale AI’s Alexandr Wang nine months ago, as the Facebook parent aims to carve out a niche in a market that’s being dominated by OpenAI, Anthropic and Google.

AWS teams are working around the clock to keep Middle East services up after drone strikes, CEO Matt Garman told CNBC on Tuesday.

OpenAI’s Stargate project in the U.K. is being paused, with the company pointing towards the cost of energy and the country’s regulatory environment.

Meta committed to spending an additional $21 billion on AI cloud infrastructure from CoreWeave on Thursday.

Intel has surged around 20% since Monday (as of Thursday morning E.T.), in signs that the chip giant could be starting to shake off its reputation as a legacy player, as partnerships with Google and Elon Musk’s Terafab project rolled in.