They say data is the new oil. If that’s the case, it makes perfect sense that the oil magnates of the last century are now positioning themselves as the data barons of this one. Saudi Arabia, historically known for its dominance in the oil industry, has announced a multi-billion dollar AI data center initiative as part of Neom, the Kingdom’s ambitious and costly urban development project along its Red Sea coast.
On Tuesday, a deal was announced between Neom (a private entity funded by the country’s Public Investment Fund) and DataVolt, a sustainable data center developer. Neom described the $5 billion agreement as a pivotal step in achieving the Kingdom’s vision of a sustainable, data-driven economy. The initiative aims to introduce energy-efficient approaches to data consumption—though some remain skeptical about its feasibility.
The new facility is set to be constructed in Neom’s “Oxagon” region, a futuristic industrial port city designed to float along the Red Sea coastline. The project claims to integrate a variety of computing densities and energy-efficient architectures to address the global challenges posed by conventional data centers.
“This agreement with Neom and Oxagon underscores our unwavering commitment to support the Kingdom’s vision of becoming a regional digital and AI hub,” stated Rajit Nanda, CEO of DataVolt. “The Kingdom’s strategic location, coupled with its abundant green energy resources, aligns perfectly with DataVolt’s mission to provide state-of-the-art sustainable data centers.”
The move signals Saudi Arabia’s intent to become a dominant investor in artificial intelligence. The Kingdom has already established relationships with leading U.S. AI companies and, last year, announced a $40 billion fund to support AI initiatives. Similarly, the neighboring United Arab Emirates has been a significant backer of Stargate, a major Silicon Valley initiative aimed at developing AI data centers across the U.S.
Despite its grand aspirations, Neom has faced significant hurdles. The initial vision for the city has been repeatedly scaled back, leading to doubts about whether the project will ever be fully realized. In November, Neom’s longtime CEO unexpectedly stepped down, raising further concerns about its viability.
Beyond logistical challenges, Neom has also been at the center of human rights controversies. A report from British broadcaster ITV indicated that around 21,000 migrant workers have died in Saudi Arabia since the launch of the Saudi Vision 2030 initiative, which includes Neom as a key component. Human Rights Watch has reported widespread labor abuses linked to these massive infrastructure projects. The Saudi government, however, has dismissed such reports as “misinformation.”
As Saudi Arabia pushes forward with its AI and data-driven ambitions, the world will be watching to see whether the Neom data center delivers on its promises—or becomes another unrealized vision in the Kingdom’s quest for technological dominance.
