NEOM’s $5 Billion Sustainable AI Data Center: Pioneering Saudi Arabia’s Digital and Green Future
Introduction
In a landmark move aligning with Saudi Arabia’s Vision 2030, NEOM and DataVolt have announced a $5 billion partnership to develop the Middle East’s first net-zero AI data center in Oxagon, NEOM’s advanced industrial city.
Slated for completion by 2028, the 1.5-gigawatt facility represents a critical step in addressing the global surge in data center energy demand driven by artificial intelligence (AI).
Combining renewable energy integration, cutting-edge cooling technologies, and strategic geographic advantages, the project aims to position Saudi Arabia as a regional leader in sustainable digital infrastructure.
However, challenges such as initial reliance on fossil fuels and human rights concerns underscore the complexities of this ambitious endeavor.
NEOM and Vision 2030: A Framework for Economic Transformation
The Vision 2030 Blueprint
Saudi Arabia’s Vision 2030, launched in 2016, seeks to diversify the kingdom’s economy beyond oil by fostering innovation, tourism, and advanced industries.
NEOM, a $500 billion megaproject in northwestern Saudi Arabia, is central to this vision, envisioned as a futuristic hub for technology, sustainability, and livability. Spanning 26,500 square kilometers, NEOM includes smart cities, renewable energy zones, and industrial complexes like Oxagon, which is designed to integrate Industry 4.0 principles with circular economy practices.
Oxagon
The Industrial Backbone of NEOM
Oxagon, situated on the Red Sea coast, is NEOM’s answer to reindustrialization. Unlike traditional industrial cities, Oxagon emphasizes robotics, automation, and AI-driven manufacturing, all powered by renewable energy.
Its strategic location offers access to global shipping lanes and subsea fiber-optic cables, making it a nexus for trade and digital connectivity. The city’s Innovation Bay further cements its role as a living laboratory for next-generation technologies, bridging the gap between research and commercialization.
The DataVolt Partnership
Scaling Sustainable Digital Infrastructure
Phased Development and Investment
The NEOM-DataVolt agreement outlines a phased approach, with Phase 1 receiving an initial $5 billion investment to deliver 1.5 gigawatts of computing capacity by 2028. Subsequent phases will expand the campus, though specifics remain undisclosed. Oxagon will lease land to DataVolt and provide infrastructure support, including renewable energy integration and logistics.
Renewable Energy Integration and Net-Zero Ambitions
A cornerstone of the project is its commitment to 100% renewable energy, leveraging NEOM’s solar, wind, and green hydrogen resources.
However, initial operations may rely on Saudi Arabia’s hydrocarbon-heavy grid until the 3-gigawatt HVDC renewable link becomes operational in 2027.
Advanced cooling systems, such as liquid immersion and passive cooling, aim to reduce energy consumption by up to 40% compared to conventional data centers.
These measures align with the International Energy Agency’s (IEA) call for urgent decarbonization of data centers, which currently consume 1–1.3% of global electricity.
Technological Innovations Driving Sustainability
Energy-Efficient Architectures
The facility will deploy high-density computing racks optimized for AI workloads, which demand significantly more power than traditional servers.
Modular designs allow for incremental capacity expansion, minimizing upfront energy waste. Energy recovery systems, such as repurposing waste heat for district heating or desalination, further enhance efficiency.
AI-Optimized Cooling Solutions
Traditional air-cooling systems are inadequate for AI data centers, which generate up to 10 times more heat per rack.
DataVolt’s facility will utilize direct-to-chip liquid cooling and rear-door heat exchangers, reducing cooling energy use by 30–50%. NEOM’s coastal location also enables seawater cooling, a method proven effective in Nordic data centers but rarely deployed in arid regions.
Economic and Geopolitical Implications
Positioning Saudi Arabia as a Regional AI Hub
The DataVolt project aligns with Saudi Arabia’s broader strategy to lead the Middle East’s AI sector.
At the 2025 LEAP Summit, the kingdom secured $21 billion in tech investments, including Microsoft’s data center academy and Equinix’s $1 billion Riyadh facility.
These developments aim to attract hyperscalers like AWS and Google Cloud, which require localized data sovereignty and low-latency services.
Competing with the UAE
Saudi Arabia’s push mirrors the UAE’s $31–52 billion pledge with France to build Europe’s largest AI data center. Both nations vie for dominance in the Gulf’s digital economy, leveraging sovereign wealth funds and renewable energy assets.
NEOM’s focus on sustainability, however, differentiates it from the UAE’s fossil-fuel-reliant grid, appealing to ESG-conscious investors.
Challenges and Criticisms
Energy Transition Realities
While NEOM aims for 100% renewables, its current dependence on Saudi Arabia’s grid—94% fossil-fueled—poses near-term carbon challenges.
The HVDC link’s 2027 completion leaves a gap where the data center may draw from non-renewable sources, undermining its net-zero claims.
Human Rights and Ethical Concerns
NEOM’s construction has displaced thousands of Howeitat tribe members, with reports of forced evictions and executions. These allegations, compounded by labor rights issues among migrant workers, risk reputational damage to DataVolt’s tenants and investors.
Conclusion
Balancing Aspiration and Accountability
The NEOM-DataVolt AI data center epitomizes Saudi Arabia’s ambition to marry technological leadership with sustainability.
By 2030, the facility could catalyze regional AI adoption, reduce reliance on foreign tech giants, and showcase renewable-powered industrialization.
Yet, its success hinges on transparently addressing energy transition gaps and human rights critiques.
As global data center emissions surge, NEOM’s model offers a template—and a cautionary tale—for reconciling digital growth with planetary boundaries.
