President Lee Jae-Myung and United Arab Emirates President Mohammed bin Zayed Al Nahyan (back row, right) applaud after South Korea’s Deputy Prime Minister and Minister of Science, Technology, Information and Communications Bae Kyung-hoon (front row, left) and Abu Dhabi Executive Director-General Khaldoon Khalifa Al Mubarak (front row, right) sign a framework MOU on artificial intelligence cooperation between the two countries in Abu Dhabi on November 18, 2025. United
Samsung Electronics, LG Electronics and SK Hynix are facing new uncertainties in their regional operations related to the artificial intelligence (AI) value chain as the US and Israeli attack on Iran escalates into a broader regional conflict involving other Middle Eastern countries.
Companies are currently monitoring potential impacts on proposed AI data center projects in Saudi Arabia and the United Arab Emirates, as well as possible disruptions to data center energy cost structures that could slow the pace of server investment.
Last November, South Korea agreed to participate in Stargate UAE, a $30 billion project to build up to 5 gigawatts of data centers in Abu Dhabi. Although specific supply plans have not yet been disclosed, the three companies are expected to play important roles in sectors such as semiconductors, infrastructure, and heating, ventilation, and air conditioning (HVAC).
Nvidia will supply systems such as the Grace Blackwell GB300 for this project. Given that Samsung Electronics and SK Hynix are Nvidia’s main suppliers of various types of memory, including high-bandwidth memory (HBM), it is likely that shipments for Stargate UAE will also be included in their supply plans.
In November, President Donald Trump’s administration gave Nvidia permission to export chips to G42, a United Arab Emirates (UAE) government-backed AI company participating in the project, raising hopes that the project would gain momentum. However, the recent crisis has increased the likelihood of delays.
The situation in Saudi Arabia is similar. Last May, NVIDIA announced plans to supply GB300 chips to Saudi Arabian AI company HUMAIN. The project also gained momentum in November when the Trump administration approved chip exports. HUMAIN will build AI infrastructure as part of Saudi Arabia’s $100 billion project Transcendence, which aims to position Saudi Arabia as an AI powerhouse.
While the crisis is unlikely to immediately halt or derail projects, industry officials said it could affect the pace of projects. Given that many large-scale projects in the Middle East are government-led, prolonged geopolitical tensions may also prompt an adjustment in budget priorities.
On November 19, 2025, former LG Electronics CEO Cho Joo-wan (center) talks with Ahmed Al Khatib, head of development and delivery at Expo City Dubai, after the two parties entered into a strategic partnership to build a smart city in Dubai. Provided by LG Electronics, November 19, 2025
LG Electronics is aggressively expanding its HVAC business for infrastructure projects in the region, and the sector could be exposed to risks stemming from the crisis.
In September, the two companies decided to cooperate in supplying cooling solutions to the AI data center in Neom, Saudi Arabia. The company also entered into a partnership with Dubai in November last year to provide advanced HVAC solutions and AI-based smart home solutions for smart city projects.
HVAC is generally more profitable than other businesses due to long-term supply and maintenance contracts and business-to-business (B2B) structures, but prolonged Middle East crises may result in delays in project orders and investments.
Another concern for businesses is the increasing volatility of energy costs. Fluctuations in oil and gas prices can impact the power industry and drive up the overall cost of operating a data center. This could cause tech companies to slow down their investment.
“While the overall momentum in AI investment will likely be maintained, the concern is that the pace of investment may slow,” said an industry source. “Companies may need to focus on managing the broader risks surrounding their AI infrastructure rather than immediate risks to production and supply.”
