In March, drones linked to Iran targeted AWS facilities in Bahrain and the UAE, causing physical damage and weeks of service outages. Amazon responded by issuing roughly $150 million in customer credits to compensate for disrupted cloud services.

Standard war exclusions in Amazon’s insurance policies meant that damage tied to military conflict was not covered, leaving the company to absorb the full $150 million hit. This gap highlights a broader risk for cloud providers operating in geopolitically unstable regions.

Ongoing disruptions at those data centers underscore how vulnerable AWS infrastructure can be to regional conflicts, potentially leading to higher security and insurance costs. Analysts warn that repeated incidents could strain margins and prompt customers to seek more resilient service options.