Saudi Arabia's NEOM has signed an agreement with DataVolt to develop a 1.5-gigawatt net-zero AI project in its Oxagon industrial zone. The first phase will see an investment of$5 billion, with operations expected to begin in 2028. The initiative aims to position the kingdom as a leading AI hub in the region, competing with the United Arab Emirates and Qatar amid soaring demand for generative AI technology.

The Saudi government has been actively pursuing AI development, with plans for a$40 billion fund in collaboration with foreign partners. The governor of Saudi Arabia's Public Investment Fund, Yasir Al-Rumayyan, has promoted the country as a potential global AI centre, citing its abundant energy resources and financial capacity. NEOM, a development nearly the size of Belgium, is a key part of the kingdom's Vision 2030 strategy to diversify its economy beyond oil.

Oxagon is set to become an industrial city powered entirely by renewable energy, aligning with NEOM's sustainability goals. However, the kingdom has scaled back some of its more ambitious projects to prioritise infrastructure essential for hosting major global events. Rising costs have influenced these adjustments, but AI remains a critical part of Saudi Arabia's long-term economic transformation.