The Strait of Hormuz has emerged as a potential vulnerability for global internet infrastructure.
Threats to undersea fiber-optic cables raise concerns among major tech companies, according to Yardeni Research.
Iran's comments about imposing fees on internet cables highlight risks to the network carrying 20% of global internet and financial data traffic.
Amazon, Google, Meta, and Microsoft are assessing vulnerabilities amid geopolitical tensions.
Alternatives like overland fiber routes and Red Sea connections require substantial investment and years to develop.
Over 500 undersea cables carry 95% of international data. Disruptions from earthquakes, accidents, or sabotage highlight physical risks.
This could add a geopolitical risk premium to tech infrastructure investments, similar to energy markets.
It also complicates Gulf nations' AI hub ambitions. Saudi Arabia, UAE, Qatar invested heavily in AI.
At least seven major cables serving Gulf AI projects pass through the Strait, creating a bottleneck.
Investment in alternative cable routes is likely to accelerate.
