As the Iran war enters its fourth week, experts are beginning to worry about something unexpected: its possible impact on the fast-growing artificial intelligence (AI) industry. And if AI slows down, the effects could spread to the wider economy too. Why AI matters so much right now AI is not just a tech trend anymore it’s helping support the U.S. economy. Investments in AI data centers alone made up 39% of U.S. GDP growth in the first three quarters of last year, according to the Federal Reserve Bank of St. Louis. Investor and Massachusetts Institute of Technology research fellow Paul Kedrosky says the war increases uncertainty because modern energy systems and digital infrastructure are deeply connected. A disruption in one area can quickly affect the other. Rising energy costs could slow AI expansion AI systems like ChatGPT depend on large data centers, many of which run on natural gas. While early damage in the conflict mainly affected oil facilities, gas infrastructure in the Gulf has also been targeted. Repairing these facilities could take months. As a result, European gas prices already jumped by nearly 30% recently. The U.S. is better protected because it produces its own natural gas. Still, if global demand shifts toward American data centers, existing supply limits could create bottlenecks and slow expansion. A hidden risk: Helium supply Another overlooked issue is helium. About one-third of the world’s helium comes from Qatar, and it is essential for making advanced computer chips used in AI. If supplies tighten, chip production and AI growth could slow. Data centers in the Middle East face direct threats Some data centers in the Middle East have already become targets during missile strikes. Just last year, the U.S. and countries like the UAE announced plans to build massive new facilities in the region. Even before the war, experts warned about high water use for cooling data centers there. Now, uncertainty around reliable energy supply makes companies more cautious about investing. Financial pressure could reduce AI investments Private credit firms have funded many data center projects. But these firms are already under pressure after investors worried AI might disrupt software companies a trend nicknamed the “SaaS-pocalypse.” As investors pull money out, less funding may be available for future AI infrastructure. At the same time, higher oil prices could push inflation up. If central banks raise interest rates in response, companies may delay expensive projects like new AI facilities. Stock market risks are growing too Economist Richard Bookstaber warned in an op-ed in The New York Times that today’s stock market depends heavily on AI companies. That makes the system more fragile problems in one major AI firm could affect the whole market. But the AI boom isn’t stopping yet Despite these risks, AI demand remains strong. The company Anthropic recently doubled its expected revenue run rate compared to last year. According to Bloomberg, some traders are even using AI tools more during the conflict to better understand market changes. Experts believe rising energy costs may slow data center growth in the short term. However, they could also push companies toward cleaner energy sources like solar and wind and more efficient cooling technologies. In short, companies may become more careful about where they invest, but they are unlikely to step away from AI anytime soon.
