Saudi Arabia’s Neom megaproject could be transformed into data centers
Saudi Arabia’s ambitious Neom megaproject could be dramatically
scaled back and repurposed as a data center hub, according to reports.
The vast development—best known for its proposed
170km-long linear city, The Line—is being
downsized amid spiraling costs, construction delays, and falling oil prices.
Sources cited by the Financial Times said
the project would now become a “far smaller” site focused on “industrial” uses,
anchored by a water-cooled data center complex on the kingdom’s northeastern
coast.
In a separate statement, Neom appeared to
acknowledge the shift, emphasizing its role in supporting Saudi Arabia’s
ambitions to become a global center for data and artificial intelligence. “As
the Kingdom works to establish itself as a global hub for data and AI, Neom is
focused on attracting investors, partners, and tenants in these fast-growing
sectors,” it said. The organization pointed to abundant renewable energy,
available land, and existing digital infrastructure as key advantages.
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How this new direction aligns with Neom’s
earlier agreement with DataVolt remains
unclear. That deal, signed in February 2025, aimed to develop an AI factory
campus at Oxagon, Neom’s industrial zone. AI venture Humain later joined the
initiative in November 2025.
Launched in 2020, Neom was originally
conceived as the home of The Line, a
futuristic city encased in mirrored steel and glass stretching from the Red Sea
deep into the desert of Saudi Arabia’s Tabuk Province. The project was designed
to house up to nine million residents at an estimated cost of $500bn, alongside
other developments such as Oxagon and Trojena, a mountain resort intended to
host the 2029 Asian Winter Games.
Construction on The Line began in 2022, but its long-term viability came
under review last year after Neom’s former chief executive abruptly resigned.
His successor, Aiman al-Mudaifer, ordered a reassessment as projected costs
reportedly ballooned to as much as $8.8tn by 2080, according to the Wall Street Journal.
If confirmed, Neom’s redesignation would add
momentum to Saudi Arabia’s rapidly expanding data center sector. S&P Global
estimates that the country’s data center power load will grow by around 29
percent annually through 2030, driven largely by the government’s Vision 2030
strategy to diversify the economy beyond oil.
Through its Hub for Manufacturing AI (Humain),
Saudi Arabia has already announced major projects, including a planned 500MW
facility in partnership with Elon Musk’s xAI venture and a separate 1GW build
with Saudi Telecom Company. Humain has said it aims to deliver 6.6GW of
capacity over the next decade.
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Despite this growth, analysts have raised
concerns about the sector’s sustainability. A joint report by Rest of World and Climate Central found that
nearly all proposed data centers in Saudi Arabia are located in regions
considered too hot for standard operations, increasing reliance on advanced
water-based or dry cooling technologies as climate pressures intensify.
Source: www.datacenterdynamics.com
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