Saudi’s Neom megaproject review may focus on data centres

Details: Vaughan O'Grady; Category: Data Centres & Networks; 04 February 2026; 8080 views

Why could much-reported plans for a radical downsizing of Saudi Arabia’s Neom megaproject be important for the telecoms sector? Partly because of its potential redesignation as a data centre hub.

According to the UK’s Financial Times newspaper, a nearly completed review of the project will propose a significant downscaling and redesigning of Neom. Delays and budget overruns haven’t helped but there has been generally massive government spending in recent years, and, with a World Cup and an Expo international trade fair to pay for and far from buoyant oil prices, cutting back on Neom may seem wise, especially if last year’s Wall Street Journal cost estimates of US$8.8 trillion by 2080 are accurate.

As the FT explains, the Neom development stretches along Saudi Arabia’s Red Sea coast and covers an area roughly the size of Belgium. Its centrepiece was to be The Line, a futuristic linear city.

The year-long review is expected to conclude by the end of the first quarter of this year or shortly after, but expectations are already being adjusted. Among other changes, a new ski resort called Trojena will probably be a lot smaller; at the very least it will no longer host the Asian Winter Games in 2029. The Line will almost certainly be radically scaled back.

This wasn’t unexpected. Work stalled after the longtime chief executive Nadhmi al-Nasr abruptly departed in November 2024. His replacement, Aiman al-Mudaifer, last year launched what was described as a comprehensive review of the scope and priority of the projects within the development.

The website Data Centre Dynamics reports that Neom could, at least partly, be repurposed as a data centre hub. It has large amounts of renewable energy, land, and existing digital infrastructure – and water; as it is on the coast it will have access to seawater cooling.

Neom’s redesignation as a data centre hub would add to the growing number of such projects approved for construction in Saudi Arabia.

This is guided in large part by the kingdom’s Vision 2030 initiative, which aims to accelerate its digital transformation amid a general diversification of the national economy away from oil production.

But this data centre focus for Neom isn’t entirely new. A number of data centre investments have been announced over recent years for Neom, dating back as far as 2021.

Whether they will be incorporated into the new plan remains to be seen. What does seem clear is that ski resorts, futuristic cities, holiday resorts and similar related projects will no longer be a priority.