ESG

Saudi to build a sustainable AI-powered data centre

Saudi Arabia is building up its artificial intelligence (AI) capabilities.

NEOM recently signed a strategic agreement with Saudi-based sustainable data centre operator DataVolt to design, develop, and operate a large-scale, AI-powered data centre in Oxagon, NEOM’s hub for advanced and clean industries. The facility will have a total planned capacity of 1.5 gigawatts (GW) and is being developed in phases. The first phase, backed by an initial investment of USD 5 billion, is expected to become operational by 2028.

The partnership aligns with the kingdom’s Vision 2030 goals to build a low-emissions, knowledge-based, technology-enabled economy, and reflects NEOM’s ambition to lead in the development of sustainable infrastructure. NEOM’s approach to digital infrastructure explicitly integrates environmental, social, and governance (ESG) criteria, particularly in areas of energy efficiency, renewable power integration, and lifecycle emissions.

The AI data centre will be built to support high-density computing workloads, a requirement driven by the exponential growth in data demand from cloud services, generative AI, and machine learning models. According to the International Energy Agency (IEA), data centres globally consume between 1% and 1.3% of electricity, which is expected to rise significantly with the widespread adoption of AI technologies. The energy and environmental footprint of such infrastructure has become a growing concern in the global technology ecosystem.

In response, the NEOM-DataVolt project incorporates an end-to-end renewable energy strategy, with a commitment to sourcing 100% of its electricity from clean energy from design through to operational execution. This is in line with NEOM’s broader energy transition agenda, which includes building one of the world’s largest green hydrogen plants and a regional grid powered entirely by wind, solar, and storage technologies.

The facility will also implement advanced cooling systems to manage the thermal demands of high-performance computing (HPC) environments. Traditional air-based cooling systems are energy-intensive and account for a significant portion of data centre electricity consumption. By deploying more efficient, possibly liquid-based or hybrid cooling systems, the NEOM data centre aims to reduce its power usage effectiveness (PUE) ratio and set new benchmarks for operational efficiency and environmental performance.

HUB FOR NEXT-GENERATION MANUFACTURING

Oxagon, the site of the development, is a purpose-built industrial city positioned on the Red Sea, designed to serve as a platform for clean industries and next-generation manufacturing. The location offers logistical and infrastructure advantages, including access to high-speed fibre optic networks via subsea cables, proximity to planned utility-scale renewable energy generation, and integration with NEOM’s circular and decarbonised economy framework. These features position Oxagon as a strategically sound and ESG-compliant site for hosting data-heavy, energy-intensive infrastructure.

Commenting on the agreement with DataVolt, Vishal Wanchoo, CEO of Oxagon, emphasised that the development underscores both the capability of Oxagon’s infrastructure and Saudi Arabia’s ambition to lead in the energy transition and digital economy.

DataVolt CEO Rajit Nanda highlighted Saudi Arabia’s competitive advantages, including its geography and renewable energy potential, as critical enablers for developing sustainable digital infrastructure at scale. He also noted that the project strengthens the kingdom’s positioning in global data markets and reinforces its role in the future of AI.

As digital technologies continue to accelerate, projects like this represent a growing intersection between energy, data, and sustainability. By anchoring the project in renewable energy and innovative design, NEOM and DataVolt are attempting to redefine the environmental baseline for future data centre development – an important step in managing the global carbon footprint of a low-emissions digital economy.

SAUDI GREEN INITIATIVE DAY

The kingdom marked its second annual Saudi Green Initiative (SGI) Day to celebrate its growing environmental movement and the national commitment to sustainability. The day was marked with several campaigns highlighting the kingdom’s achievements and progress in creating an environmentally friendly ecosystem.

With more than SAR 705 billion committed across more than 85 initiatives, the programme touches every corner of the kingdom’s economy. In the energy sector, 6.6 GW of renewable energy capacity were connected to the national grid in the past year alone. Another 44.2 GW are in development, signalling Saudi Arabia’s ongoing shift toward an optimal energy mix. Complementing this, the Liquid Fuel Displacement Program is cutting emissions by replacing diesel and crude with efficient natural gas at four power plants totalling 5.6 GW of capacity.

Land restoration is also a cornerstone of SGI. As of early 2024, over 115 million trees have been planted across the country, and more than 118,000 hectares of degraded land – an area larger than the city of Los Angeles – have been rehabilitated. These reforestation efforts not only combat desertification but also contribute to biodiversity conservation.

Wildlife protection has seen significant progress too. More than 7,500 endangered animals including Arabian oryx, gazelles, ibex, and houbara have been successfully rewilded through breeding and reintroduction programmes. These projects are part of a broader effort to protect the kingdom’s rich natural heritage and restore balance to fragile ecosystems.