Neom, Saudi Arabia’s Dystopian Desert City Project, Announces $5 Billion AI Data Center

They say data is the new oil. If that’s the case, it makes total sense that the oil kings of the last century are trying to become the data kings of this one. That’s a longwinded way of saying Saudi Arabia (the aforementioned oil kings) have announced a new multi-billion dollar AI data center project. The project is said to be part of Neom, the ridiculously expensive, multi-trillion dollar urban development effort based along the Saudi Arabian coast.

On Tuesday, the deal between Neom (a private company owned by the nation’s Public Investment Fund) and a sustainable data center developer named DataVolt was announced via press release. Neom called the $5 billion deal a “landmark agreement, marking a significant step toward realizing the Kingdom’s vision for a sustainable, data-driven economy.” Hearing Saudi Arabia talk about “sustainability” is pretty much the weirdest thing ever, but here we are. Supposedly, this deal is going to usher in new “energy efficient” methods of data consumption. You’ll excuse me if I don’t hold my breath on that one.

The new data center will allegedly be built in Neom’s “Oxagon” region, a “floating” industrial port city that is being constructed along the Red Sea coast. The factory will “integrate a wide range of computing densities and energy-efficient architectures to address the global challenges posed by traditional data centers,” the press release claims.

“This agreement with NEOM and Oxagon underscores our unwavering commitment to support the Kingdom’s vision of becoming a regional digital and AI hub,” said Rajit Nanda, CEO of DataVolt. “The Kingdom’s strategic location, coupled with its abundant green energy resources, aligns perfectly with DataVolt’s mission in providing state-of-the-art sustainable data centers.”

The deal illustrates the Saudis’ interest in becoming a bedrock investor in the artificial intelligence industry. The Saudis have fostered connections with many of America’s top AI companies and, last year, the Kingdom also announced a new $40 billion fund to channel money into various AI projects. The Saudis close friend and neighbor, the United Arab Emirates, are also known for being one of the largest donors to Stargate, the recently announced Silicon Valley project to construct AI data centers throughout the U.S.

As a project, Neom hasn’t otherwise been going that great. Despite the titanic ambitions that originally characterized the city-building effort, the Saudis have perpetually had to scale back their plans—to the point where it has sometimes seemed doubtful that project as originally envisioned will ever actually be finished. In November, Neom’s longtime CEO stepped away from the project without explanation.

Like other things associated with Saudi Arabia, Neom would also appear to be a bit of a human rights nightmare. A report from the British public broadcaster ITV recently claimed that some 21,000 migrant construction workers had died in Saudi Arabia since 2017, when the nation’s Saudi Vision 2030 effort (of which Neom is a huge part) began. Human Rights Watch has also reported that the Kingdom’s empire-building projects are built on “widespread labor abuses.” The Saudis have called reports of the vast death toll surrounding Neom “misinformation.”