Saudi Arabia Invests $5B to Build Neom's AI Data Center
Saudi Arabia's ambitious Neom project has taken another major step toward becoming a global tech and innovation hub. The futuristic city has signed a $5 billion deal with DataVolt, a Saudi-based data center operator, to build a massive artificial intelligence data center within its Oxagon industrial zone. This move further intensifies the competition between Saudi Arabia and the United Arab Emirates (UAE) to establish dominance as the Gulf's AI superpower.
A Key Step in Vision 2030
Launched in 2017 under the leadership of Crown Prince Mohammed bin Salman, Neom is a cornerstone of Saudi Arabia’s Vision 2030—a strategy aimed at reducing the country’s dependence on fossil fuels and transforming its economy through investments in high-tech industries, tourism, and innovation. The new AI data center is expected to play a crucial role in this transformation by providing the infrastructure necessary for advanced computing, AI development, and digital services.
The first phase of the project, with an investment of $5 billion, will power a 1.5-gigawatt facility set to be operational by 2028. The AI hub will be built in Oxagon, a planned floating industrial complex within Neom, designed to be the world’s largest of its kind.
Gulf Rivalry in AI and Data Infrastructure
The deal comes amid growing investments in AI and data infrastructure across the Gulf region. Both Saudi Arabia and the UAE are aggressively positioning themselves as global AI powerhouses, leveraging their financial resources to develop cutting-edge technology ecosystems.
Just last week, the UAE and France announced a joint commitment of up to $52 billion to build Europe's largest AI data center. The competition between Saudi Arabia and the UAE reflects a broader trend of Middle Eastern nations investing heavily in digital transformation, AI, and cloud computing to drive future economic growth.
Neom: A Trillion-Dollar Megacity
Neom, estimated to cost anywhere between $500 billion and $1.5 trillion, is one of the most ambitious urban development projects in history. Its flagship development, The Line, is envisioned as a 170-kilometer-long linear city designed to house 9 million people in a high-tech, sustainable environment. Plans also include a year-round artificial ski resort and multiple entertainment destinations, further positioning Neom as a futuristic metropolis.
However, the project has not been without controversy. Human rights organizations, including the United Nations, have raised concerns over allegations of forced displacement of local communities, particularly the Howeitat tribe. Reports of possible executions of displaced individuals have drawn international criticism, adding to the project’s scrutiny.
The Future of AI in Saudi Arabia
With the AI sector emerging as a key battleground for economic influence in the region, Saudi Arabia’s investment in Neom’s data infrastructure signals its commitment to becoming a leader in AI and digital transformation. As the world shifts towards a technology-driven future, the success of Neom’s AI data center could significantly impact the kingdom’s global standing in artificial intelligence and smart city development.
