Saudi Arabia’s ambitious NEOM megacity project has taken a major step forward in its artificial intelligence ambitions, signing a landmark agreement with DataVolt to develop a massive AI-powered data center. According to the Saudi Press Agency, the first phase of this groundbreaking project will receive $5 billion in investment, marking one of the largest AI infrastructure commitments in the Middle East.
The 1.5-gigawatt data center facility is scheduled to come online by 2028 and will be strategically located within NEOM’s Oxagon industrial hub. DataVolt, described as a Saudi-based international developer and operator of data centers, will spearhead the development and operations of this cutting-edge facility designed to support advanced AI workloads and computational demands.
NEOM itself represents Crown Prince Mohammed bin Salman’s flagship initiative, launched in 2017 as a cornerstone of Saudi Arabia’s Vision 2030 economic transformation plan. The broader Vision 2030 strategy aims to diversify the kingdom’s economy away from its traditional dependence on fossil fuels, positioning Saudi Arabia as both a luxury tourism destination and a global innovation hub.
This AI data center investment comes amid intensifying regional competition between Saudi Arabia and the United Arab Emirates to establish dominance as the Gulf’s AI superpower. Both nations have dramatically increased their investments in data center infrastructure and artificial intelligence capabilities. Just last week, the UAE and France announced a joint commitment of between $31 billion and $52 billion to construct Europe’s largest AI data center, demonstrating the scale of investment flowing into AI infrastructure across the region.
NEOM’s overall cost estimates vary dramatically, with some projections reaching as high as $1.5 trillion, while official communications suggest a more conservative figure closer to $500 billion. The megacity’s most ambitious component, known as “the Line,” is designed to accommodate 9 million people alongside an extensive robot workforce. Additional planned features include a year-round ski resort with artificial snow and multiple theme parks.
However, the NEOM project has faced significant international scrutiny over alleged human rights violations against indigenous Howeitat tribespeople whose ancestral lands occupy the development area. In 2023, the United Nations expressed serious concerns about potential executions of Howeitat tribe members. NEOM officials did not immediately respond to requests for comment on these ongoing controversies.
Key Quotes
The 1.5-gigawatt factory is expected to be online by 2028 and will be built in Neom’s Oxagon industrial hub.
This technical specification from the Saudi Press Agency report highlights the massive scale of the data center project and provides a concrete timeline for when this AI infrastructure will become operational, signaling Saudi Arabia’s aggressive push to establish AI capabilities within the next few years.
In 2023, the United Nations said it had concerns about the possible executions of members of the Howeitat tribe, whose people live in the area in which Neom is being built.
This statement from the United Nations underscores the serious human rights controversies surrounding the NEOM project, raising critical questions about the ethical dimensions of AI infrastructure development and the human cost of technological advancement in the region.
Our Take
The convergence of AI ambitions and megaproject development in Saudi Arabia reveals how artificial intelligence has become central to national economic strategies. This isn’t merely about building data centers—it’s about establishing technological sovereignty in an AI-driven future. The $5 billion investment, while substantial, represents just one component of a much larger transformation strategy that views AI infrastructure as foundational to economic diversification.
What’s particularly noteworthy is the timeline acceleration: a 1.5-gigawatt facility operational by 2028 suggests confidence in sustained AI demand growth and perhaps insider knowledge about future AI computational requirements. The regional competition with the UAE creates a dynamic that could benefit the global AI ecosystem through infrastructure redundancy and innovation, though it also raises questions about resource allocation and sustainability. The persistent human rights concerns, however, cast a shadow over these technological ambitions, reminding us that AI development cannot be divorced from ethical considerations about how and where this infrastructure is built.
Why This Matters
This $5 billion AI data center represents a critical milestone in the Middle East’s race to become a global AI powerhouse. As artificial intelligence demands exponentially more computational resources, nations are recognizing that controlling AI infrastructure equals strategic technological advantage. Saudi Arabia’s massive investment signals its determination to position itself at the forefront of the AI revolution, not merely as a consumer of AI technology but as a provider of essential AI infrastructure.
The regional competition between Saudi Arabia and the UAE reflects a broader global trend where nations view AI capabilities as essential to economic competitiveness and national security. The scale of these investments—billions of dollars in single projects—demonstrates how AI infrastructure has become as strategically important as traditional energy infrastructure once was.
For the global AI industry, these Gulf investments could reshape the geographic distribution of AI computational power, potentially creating new regional AI hubs outside traditional centers in the United States and China. The 2028 timeline also provides insight into how quickly nations expect AI demand to grow, requiring massive data centers to support increasingly sophisticated AI models and applications. However, the human rights concerns surrounding NEOM raise important questions about ethical considerations in AI infrastructure development.
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Source: https://www.businessinsider.com/neom-saudi-arabia-5-billion-sustainable-ai-data-center-2025-2