The First AI War Just Started

It’s not our place to tell you what to think about geopolitics or foreign policy. Our job is to help you understand how global events shape the markets, so you can make informed decisions that help you build your family’s wealth.

But sometimes the world outside the charts gets too loud to ignore. That’s the case right now with the Middle East conflict.

Since the war broke out, airspaces have closed… embassies have shuttered… and entire neighborhoods have been damaged by missile strikes. The death toll continues to rise. It’s the sad reality we have to contend with when we analyze the markets.

But in all the turmoil, there’s one news story that isn’t getting enough attention.

Last week, Amazon Web Services (AWS) reported that several of its data centers in the UAE and Bahrain were damaged by Iranian drone strikes, causing fires and outages. These are the first known military strikes on a major American hyperscaler’s infrastructure.

Hyperscalers are tech giants – like Amazon, Alphabet, Meta and Microsoft – that run massive global data center networks that power artificial intelligence (AI) applications and keep the internet running 24/7.

Some estimates forecast AI hyperscalers to spend up to $5 trillion over the coming years to build data centers and infrastructure. And they’re projected to contribute more than $12 trillion to global GDP by 2030.

I don’t think the market fully understands the implications of the strikes yet.

Markets are very good at pricing familiar news like interest rates or earnings reports.

They’re much less comfortable pricing geopolitical shocks. That’s why stocks are trading in a confused way, chopping sideways since the start of the war, and now starting to roll over.

Look, nobody knows how the Middle East conflict is going to play out. But here at the Daily, we always have a gameplan.

Editor Teeka Tiwari has been guiding readers through the good times and the bad since 2016. Before that, he navigated Wall Street clients through every global meltdown you can think of: from the ’89 junk bond crash… to the 1990 Gulf War… the dot-com bubble… and the 2008 financial crisis.

Now, I don’t have a four-decade track record like Teeka does. But I’ve been in these markets for nearly 15 years. I’ve helped our readers make money through the 2020 pandemic crash… the 2022 invasion of Ukraine… and the 2023 U.S. regional banking crisis.

And today, I’ll show you how the AWS drone strikes will impact the markets we follow.

The First Strike in the AI War