Data is often referred to as the new oil, and Saudi Arabia, a dominant player in the oil industry, is striving to become a leader in the data-driven world. The kingdom recently announced a multi-billion dollar investment in a new AI data center, part of its ambitious, and controversial, Neom project.
Neom, a futuristic urban development project along the Saudi Arabian coast, has been plagued by setbacks and controversies since its inception. This latest endeavor, a $5 billion partnership with sustainable data center developer DataVolt, aims to establish a “sustainable, data-driven economy,” according to a Neom press release. The new data center, planned for Neom’s “Oxagon” region—a floating industrial port city on the Red Sea—is touted to employ “energy-efficient” methods of data consumption and address the environmental challenges posed by traditional data centers.
DataVolt’s CEO, Rajit Nanda, emphasized the alignment of Saudi Arabia’s vision with their mission of providing sustainable data centers, citing the Kingdom’s strategic location and green energy resources. This investment aligns with Saudi Arabia’s broader push into the AI industry, including a $40 billion fund dedicated to various AI projects and fostering relationships with leading American AI companies. The United Arab Emirates, a close ally of Saudi Arabia, is also a significant investor in Stargate, a Silicon Valley project focused on constructing AI data centers across the U.S.
Despite the grand vision, Neom has faced significant challenges, including scaled-back plans and the unexplained departure of its long-time CEO in November 2024. Beyond financial and logistical hurdles, Neom has also drawn heavy criticism for its human rights record. Reports by ITV claim that approximately 21,000 migrant construction workers have died in Saudi Arabia since 2017, coinciding with the launch of Saudi Vision 2030, of which Neom is a key component. Human Rights Watch has further documented widespread labor abuses associated with the Kingdom’s megaprojects. The Saudi government has dismissed these reports as misinformation.
In conclusion, Saudi Arabia’s significant investment in an AI data center within Neom highlights its ambition to become a global leader in the data-driven future. However, the project faces ongoing challenges, including scaling back plans, management changes, and serious allegations of human rights abuses. The long-term success and ethical implications of this endeavor remain to be seen.
