Investor Compensation for Amazon Data Centre Strikes in the Iran War

Data Centres as Critical Infrastructure and their Vulnerability to Military Targeting

Data centres are facilities that primarily contain information technology (IT) equipment that processes, stores and transmits digital information (Oró & Salom, 2017). Amazon Web Services, Inc. (Amazon) have reported that in early March 2026 a drone hit two commercial data centre facilities in the United Arab Emirates (UAE) while in Bahrain a drone stroke in close proximity to one of their data centres causing physical damage to the infrastructure (Raman & McMahon, 2026). Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed responsibility for the attacks, alleging that data centres supported the United States (US) military and intelligence operations. With countries worldwide, such as the United Kingdom (Department for Science, Innovation and Technology & The Rt Hon Kyle, 2024) and the US (CISA, 2026) formally designating data centres as critical infrastructure, it is unsurprising that data centres have become strategic targets in wartime. Their relevance to national security, economic stability and the functioning of public services makes them particularly vulnerable infrastructure within the digital and physical landscape of modern warfare.

Big Tech corporations are major investors in data centre infrastructure. Amazon’s data centres in the UAE and Bahrain, for example, were part of a USD 5.3 billion investment in the Middle East region. In the era where data centres are increasingly exposed to risks of military attacks, the question arises whether monetary compensation is available for corporate investors when commercial data centres are damaged by military action in times of conflict. This blog explores Amazon’s data centre strikes in the Iran war as a case study to answer this question within the framework of international investment law.

Foreign Investment Protection under International Investment Law

There are currently 2,660 international investment agreements (IIAs) in force (UNCTAD, 2026). They were conceived within the neoliberalism philosophy as a means to attract long-term foreign investments, particularly in capital‑intensive sectors such as technology and infrastructure. IIAs traditionally contains substantive provisions that define standards of investor and investment protection. Fair and equitable treatment, full protection and security, protections against expropriation, and non-discrimination are examples. These provisions impose legally binding obligations upon host states and grant foreign investors broad access to investor-state dispute settlement mechanisms. In particular, they allow foreign investors to initiate binding international arbitration, through which tribunals may order the respondent state to provide compensation in the event of breach of substantive treaty provisions.

Investment Protection for Amazon’s Data Centres in Bahrain and the UAE

Amazon Web Services, Inc. is a corporation with headquarters registered in the US.(Bloomberg, 2026). The case of Amazon’s data centres, therefore, involve American-owned investments in the host states of Bahrain and the UAE. Thus, the bilateral investment treaty between the US and Bahrain (US-Bahrain BIT 1999) is relevant here. This treaty which came into force on 30 May 2001 includes a detailed provision related to compensation for damages due to war and similar events under article 4. Such clause is sometimes described as ‘protection from strife’ in other IIAs.

Article 4 of US-Bahrain BIT 1999 stipulates:

1. Each Party shall accord national and most favored nation treatment to covered investments as regards any measure relating to losses that investments suffer in its territory owing to war or other armed conflict, revolution, state of national emergency, insurrection, civil disturbance, or similar events.
2. Each Party shall accord restitution, or pay compensation in accordance with paragraphs 2 through 4 of Article 3, in the event that covered investments suffer losses in its territory, owing to war or other armed conflict, revolution, state of national emergency, insurrection, civil disturbance, or similar events, that result from:

(a) requisitioning of all or part of such investments by the Party's forces or authorities, or

b) destruction of all or part of such investments by the Party's forces or authorities that was not required by the necessity of the situation.

The implication of this provision is that no compulsory compensation is owed to Amazon as a result of damages caused to its data centre in Bahrain in the Iran war. Such compensation would only become mandatory if Bahrain had caused or contributed to the damages of Amazon’s data centres in the country.

Under the US-Bahrain BIT 1999, the protections conferred on Amazon as a foreign investor relate predominantly to the application of non‑discrimination principles (national treatment and most‑favoured‑nation treatment). These obligations require Bahrain to accord Amazon treatment no less favourable than that afforded to its own domestic investors or to investors from any third state in like situations with respect to restitution, indemnification, compensation or any settlement. Consequently, if Bahrain provides compensation or other remedial measures to domestic entities or to investors of other nationalities in like situations for losses sustained during the Iran war, it must extend equivalent treatment to Amazon. A failure to do so would constitute discriminatory conduct, thereby entitling Amazon to initiate proceedings through binding investor–state arbitration. Such protection is applicable irrespective of the US’ involvement in the Iran war.

In contrast, Amazon does not benefit from comparable protections in relation to the damage inflicted on its data centres in the UAE. This is because there is no BIT between the US and UAE. Although the Agreement Concerning the Development of Trade and Investment Relations between the Government of the United States of America and the Government of the United Arab Emirates (UAE-United States TIFA) was signed in 2004 to promote further both countries' international trade, investment and economic interrelationship, there are no substantive provisions on investor and investment protection. In the absence of such provisions, Amazon’s investments in the UAE fall outside the scope of substantive and procedural protections typically available under international investment law. As a result, Amazon cannot invoke investment treaty‑based protections in response to the damage sustained in the UAE.

Given these outcomes, it becomes relevant for corporate investors to assess, at the planning stage of any cross‑border investment, whether an international investment treaty exists between their home state and the prospective host state. The presence or absence of such treaties can significantly influence the extent of legal protection available in situations involving armed conflict or other forms of large‑scale disruption, such as those witnessed during the Iran war. By verifying the existence of an international investment treaty in advance, corporate investors can determine whether they will benefit from substantive guarantees, such as non‑discrimination.

Bibliography

Bloomberg. (2026, April 1). Amazon Web Services, Inc. Retrieved April 1, 2026, from Bloomberg Legal Entity Identifier: https://lei.bloomberg.com/leis/view/2549000I2PRQGGIGCA75

CISA. (2026). Critical Infrastructure Sectors. Retrieved March 30, 2026, from Cyber Security & Infrastructure Security Agency: https://www.cisa.gov/topics/critical-infrastructure-security-and-resilience/critical-infrastructure-sectors

Department for Science, Innovation and Technology, & The Rt Hon Kyle, P. (2024, September 12). Data centres to be given massive boost and protections from cyber criminals and IT blackouts. Retrieved March 30, 2026, from Gov.UK: https://www.gov.uk/government/news/data-centres-to-be-given-massive-boost-and-protections-from-cyber-criminals-and-it-blackouts

Oró , E., & Salom, J. (2017). Data Centre Overview. In J. Salom, T. Urbaneck, & E. Oró, Advanced Concepts for Renewable Energy Supply of Data Centres (pp. 1-26). New York: River Publishers.

Raman , R., & McMahon, L. (2026, March 3). Amazon says drones damaged three facilities in UAE and Bahrain. Retrieved March 30, 2026, from BBC News: https://www.bbc.co.uk/news/articles/cgk28nj0lrjo

UNCTAD. (2026, April 1). Retrieved April 1, 2026, from Bahrain - United States BIT (1999): https://investmentpolicy.unctad.org/international-investment-agreements/treaties/bilateral-investment-treaties/362/bahrain---united-states-bit-1999-

UNCTAD. (2026, April 1). Investment Policy Hub. Retrieved April 1, 2026, from International Investment Agreements Navigator: https://investmentpolicy.unctad.org/international-investment-agreements