Is US fighting ‘wrong war’? Iran threatens Trump’s $500bn Stargate project – report

The escalating conflict involving the United States, Israel and Iran is beginning to spill beyond the battlefield and into the global technology race, with Chinese analysts warning that Washington’s flagship US$500 billion Stargate AI Project could face major disruption as instability spreads across the Gulf.Iran’s reported attacks on data centres in the United Arab Emirates had exposed the vulnerability of America’s overseas AI infrastructure ambitions Chinese media reported citing analysts at the China Macroeconomy Forum in Beijing. The experts raised broader questions about whether geopolitical conflicts could derail the next phase of the global artificial intelligence boom.The warnings come at a time when the United States is aggressively competing with China for technological dominance in artificial intelligence, semiconductors and computing infrastructure. The Stargate project, announced by US President Donald Trump shortly after returning to office in January 2025, has been positioned as a cornerstone of that strategy.The initiative, backed by OpenAI, SoftBank, Oracle and UAE-based AI company MGX, aims to invest US$500 billion in AI-focused data centres and energy infrastructure. A central component of the plan is a US$30 billion expansion in the UAE intended to host what has been described as the world’s largest AI data centre cluster.However, analysts at the Beijing forum argued that the war with Iran has turned the Gulf, once seen as a stable strategic base for AI infrastructure, into a potential liability.Li Wei, Associate Dean of the School of International Relations at Renmin University, said the conflict had directly affected the project’s regional expansion plans.“Trump’s first priority upon taking office was the Stargate project. Last May, he visited the Middle East specifically to ground this project in the region. Currently, Iran’s attacks on computing centres in the UAE have cast uncertainty over Stargate’s Middle Eastern expansion,” Li said.According to Li, Iran’s Islamic Revolutionary Guard Corps had targeted computing facilities in the UAE, including reported strikes on Amazon Web Services infrastructure in March 2026 that caused major outages. He added that the Stargate campus in Abu Dhabi had been labelled a “legitimate target”.The comments reflect growing concerns that modern conflicts are increasingly targeting digital and energy infrastructure rather than only military assets. Large AI systems require vast computing power, uninterrupted electricity and secure data networks, making data centres strategically important during wartime.Li argued that the conflict was not only weakening America’s regional standing but also undermining confidence in Washington’s long-term strategic judgement among allies.He described the war as the “wrong war” and said it had “actively accelerated the erosion of American global hegemony”.According to Li, allies across Europe, Asia and the Middle East were beginning to question “American operational capability and strategic rationality” after the conflict failed to produce “substantial benefits” for the United States.Other analysts at the forum suggested the war could also reshape perceptions of military power and economic resilience.Tian Wenlin, Director of the Institute of Middle East Studies at Renmin University, said Iran’s use of drones and hypersonic missiles had challenged assumptions about US military superiority.“With the war unfolding as it has, the myth of US military invincibility has effectively been shattered,” Tian said.He argued that Washington faced a strategic dilemma in which withdrawing too quickly could damage its credibility, while deeper involvement risked a prolonged and expensive conflict similar to the Vietnam War.The analysts linked the military conflict directly to economic strain in the United States, warning that rising defence expenditure could weaken investment in advanced technologies such as AI.Tian said the United States’ national debt had reached US$39 trillion and estimated the current cost of the war at US$50 billion.He described the conflict as a “heavy burden” on a “hollowed-out” economy and warned that financial and political resources were being diverted away from projects like Stargate.The forum also highlighted how the conflict could influence China’s own strategic calculations, particularly in energy security and its rivalry with Washington.

Mao Zhenhua, co-director of Renmin University’s Institute of Economic Research, said the war had exposed limits to US global influence.“If the US was struggling to deal with a sanctioned country such as Iran, its ability to coerce major powers such as China had effectively evaporated,” Mao said.Mao also urged Beijing to diversify energy supply routes and reduce reliance on vulnerable maritime chokepoints such as the Strait of Malacca, which remains critical for China’s oil imports.“We must assess whether there are other risks within the current geopolitical context, such as those involving the Strait of Malacca,” he said.The remarks underscore how the Iran conflict is increasingly being viewed not only as a regional security crisis but also as a development with implications for the global balance of technological and economic power. For Washington, the disruption to Stargate threatens one of its most ambitious AI infrastructure projects. For Beijing, the conflict is being interpreted as evidence that geopolitical instability could weaken America’s ability to sustain its technological dominance abroad.