It seemed too good to be true. In a region plagued by conflict, Dubai had the air of a place apart. It drew the well-heeled and economically footloose, to live, work and make money, or to enjoy shopping and sun. It became a global transport hub, linking east and west. It has used its wealth to join the artificial-intelligence race. Key to it all was keeping out of regional conflicts. Not even Hamas’s attack on Israel in October 2023, the ensuing Gaza war or last year’s 12-day fight between Iran and Israel did much to knock confidence.
Now Iran’s retaliation against the American and Israeli attacks that began on February 28th has hit the heart of all this—and shaken Dubai’s halo of safety. The Fairmont, a hotel on the Palm Jumeirah, a swanky man-made property development, was in flames on day one. An Amazon Web Services (AWS) data centre caught fire. The airport, home to Emirates, the world’s largest international airline, and essential to Dubai’s tourist trade, was damaged and flights were suspended. Jebel Ali, the emirate’s fast-growing port and transshipment hub, paused operations. Debris fell in residents’ backyards.
Dubai, like the rest of the United Arab Emirates (UAE), has so far been resilient; it is too soon to tell what the long-term effects of the war might be. But what until a few days ago was the stuff of small print has become reality. Though most foreign residents are sitting tight, some are leaving or planning to, if only for a while, via Oman or Saudi Arabia, where airspace has stayed open. America’s State Department has advised citizens to leave the region. Businesses, too, are staying put, but are making contingency plans. The question is whether the people and money that have fuelled Dubai’s rise as a global business hub will keep coming as they did before.
For some time, to attract people Dubai has been issuing more long-term visas and making it easier for foreigners to buy homes. The emirate’s population grew by 5.6% last year, the fastest rate since 2019, to 3.9m. The number of millionaires has been rising fast, too, and businesses eager to serve them have followed. Last year the then chief financial officer of Standard Chartered, a bank, called its Dubai operation a “blueprint” for its other wealth-management centres. Dubai’s broader financial industry is thriving, too: in the first half of 2025 more than 1,000 firms set up shop in its financial centre, almost a third more than did so a year before. Last year JPMorgan, America’s biggest bank, expanded its local outpost.
Technology giants have also been attracted to Dubai. It is home to at least 18 data centres (including the AWS facility struck after war broke out), half the UAE’s total. In turn, the UAE boasts more than half of the Gulf’s planned data-centre investments. The Emiratis are placing big bets on AI, including partnerships with Microsoft and Blackrock for $30bn-worth of investments in infrastructure, and stakes in OpenAI, Anthropic and xAI.
Though it is early days, the attacks are changing companies’ calculations. Few seem to have even thought about war-related risk in the UAE before. Now they are considering political-risk insurance, policies that firms usually buy to protect themselves in emerging markets, says Christopher Coppock, head of geopolitical and economic risk analysis at Marsh, a consultancy. Such insurance is priced based on factors such as a country’s risk of terrorism, war and strikes, as well as the criticality of the activity insured and its precise location (being close to a military base, for instance, will cost more). “From the perspective of businesses, there is no undoing what has happened,” he says.
Any companies thinking of leaving, or pulling back, will have to weigh the alternatives to being in the emirate, and its strategic importance. Some financial firms that relocated to Dubai after years of wading through the pandemic in Hong Kong or Singapore may be keen to decide quickly this time, so Dubai may have to act fast to keep them.
Dubai’s rulers have done their best to instil confidence. Most of the Iranian drones and missiles have been intercepted, and there has been little panic. Supermarkets such as Carrefour, a French chain, and Spinneys, also popular with Westerners, say they are well-supplied. DP World, the port operator, quickly resumed operations. The UAE’s president, Mohammed Bin Zayed, was out and about in Dubai Mall, a giant symbol of the city’s allure, on March 2nd.
Even so, plumes of white smoke, the booms of missile interceptions and the thunder of fighter jets are hard to miss in a city known for its glitz and glamour. So is the contrasting eerie quiet that mostly fills the air. Officials have said Dubai “pivots” well in a crisis. How quickly it now acts to reassure businesses, investors and people is its next big test. But much is out of its rulers’ control. They cannot determine how the war will play out. And they cannot relocate Dubai.