# NEOM’s AI Data Centre Moves Closer to Construction Saudi Arabia’s planned 1.5-gigawatt AI data centre campus at NEOM’s Oxagon industrial hub could begin construction within two to three months, according to DataVolt chief executive Rajit Nanda. That is a meaningful update—but not yet a groundbreaking, a financing close or a customer announcement. The distinction matters. Gulf AI infrastructure plans are now measured in gigawatts and billions of dollars, while the difficult work lies in securing power, equipment, capital and committed tenants. The Oxagon project is moving from an agreement towards execution, but important commercial details remain undisclosed. *Cover: original SultanByte data visual based on figures from NEOM, DataVolt and AGBI.* ## What has actually been confirmed [AGBI reported on 5 August](https://www.agbi.com/tech/2026/08/neom-to-start-constructing-oxagon-ai-data-centre-in-months/) that Nanda expects the first phase to break ground in the next two to three months. He said the development had reached the “last mile” and that DataVolt was in final-stage discussions with several customers. Those are executive statements, not completed milestones. DataVolt did not disclose the first phase’s capacity, prospective customers or contract values. Nanda also said the company expects to secure non-recourse project finance for its Saudi facilities, including NEOM, within six months. As of the research cut-off, that financing was an expectation rather than a disclosed close. The underlying project is better established. [NEOM and DataVolt announced their agreement](https://www.neom.com/en-us/newsroom/datavolt-signs-agreement-with-neom) in February 2025. [Reuters reported](https://www.reuters.com/technology/artificial-intelligence/saudi-neom-datavolt-sign-agreement-launch-5-billion-ai-project-2025-02-10/) a planned 1.5GW campus, a $5 billion first-phase investment and a 2028 operational target, citing Saudi state media. Oxagon is to lease the land and provide infrastructure support. Specialist publication [Data Center Dynamics reported](https://www.datacenterdynamics.com/en/news/datavolt-plans-15gw-data-center-campus-in-neoms-oxagon/) that the first phase was expected to provide 300MW, although AGBI’s latest report says DataVolt has not disclosed the phase’s capacity. The safe reading is therefore that 300MW is a previously reported plan, not a newly reconfirmed figure. NEOM and DataVolt call the campus an “AI factory”: infrastructure designed for dense AI training and inference workloads, with high-capacity power, cooling and connectivity. NEOM says it is intended to run entirely on renewable energy and operate at net zero. Those are design objectives; operating performance can only be tested after facilities and generation are commissioned. ## Power and financing will decide the timetable A 1.5GW campus is not simply a large IT project. It is energy infrastructure with servers attached. The [International Energy Agency’s April 2026 assessment](https://www.iea.org/reports/key-questions-on-energy-and-ai/executive-summary) estimates that global data centre electricity consumption rose 17% in 2025 to 485 terawatt-hours, while consumption from AI-focused sites increased 50%. Its central projection has total data centre demand roughly doubling to 950TWh by 2030, or about 3% of global electricity use. The IEA also warns that grid connections, electrical equipment, chips, capital and high-bandwidth memory are constraining delivery. For Oxagon, the practical questions are therefore specific: * Which renewable generation and storage assets will supply each phase, and on what schedule? * What firm power arrangement will cover periods when wind and solar output fall? * Which cooling design will be used, and what are its water and energy requirements? * Have anchor customers signed capacity contracts, or are discussions still non-binding? * When will project finance close, and what conditions must be met before funds are drawn? A construction start would answer only the first execution question. Energisation, customer occupancy and reliable operation are later gates. ## Saudi Arabia and the UAE are taking different routes Saudi Arabia already has a growing domestic base. The [Ministry of Communications and Information Technology said](https://mcit.gov.sa/en/node/248595) operational data centre capacity increased from 68MW in 2021 to more than 440MW in 2025. It counted more than 60 data centres developed by over 20 companies, with investment exceeding SAR16 billion. These are official Saudi figures and should be read as the government’s market assessment. Oxagon’s proposed 1.5GW is more than three times that reported 2025 national operational capacity, which shows both its potential scale and execution risk. It also differs geographically from Riyadh and Jeddah facilities: the Red Sea location is being positioned around access to land, renewable resources, industrial infrastructure and international connectivity. The UAE is pursuing a larger, partnership-led model. A [U.S. government account of the UAE-US AI Campus](https://ae.usembassy.gov/uae-and-us-presidents-attend-the-unveiling-of-phase-1-of-new-5gw-ai-campus-in-abu-dhabi/) describes a planned 5GW campus in Abu Dhabi, spanning ten square miles, to be built by G42 and operated with US companies. It says the power mix is intended to include nuclear, solar and gas, while access to advanced compute will involve security and know-your-customer controls. The comparison is not “Saudi versus UAE” on one leaderboard. Saudi Arabia is pitching renewable-powered compute close to energy and industrial assets; the UAE is combining scale with US technology partnerships, export-control safeguards and a more diversified firm-power mix. Customers will judge both on delivered capacity, price, latency, regulatory assurance and resilience—not announced gigawatts. ## From announcements to execution The Oxagon update shows the region’s AI competition entering a harder phase. Announcements are giving way to construction schedules, financing structures and customer commitments. That is healthy: each successive milestone makes projects easier to evaluate. It also expands the risk surface. AI campuses concentrate valuable hardware, sensitive workloads and critical power systems. Boards should connect capacity decisions to cyber resilience rather than treat infrastructure and security as separate workstreams; SultanByte’s recent analysis of [Middle East data breach costs](https://www.sultanbyte.com/middle-east-data-breach-cost-2026) explains why recovery design and governance deserve executive attention. ### What technology buyers should ask CTOs and procurement leaders should avoid reserving future capacity on headline specifications alone. Ask providers for an energisation schedule, contracted power sources, redundancy design, cooling limits, chip availability, data-location terms and exit provisions. Separate “planned”, “under construction”, “energised” and “generally available” capacity in every evaluation. For regulated workloads, verify who administers the platform, who controls encryption keys, which courts and regulators have jurisdiction, and whether operations depend on cross-border support. Local hosting can improve latency and data residency without automatically delivering operational sovereignty. ### What investors and developers should watch Financiers should track signed offtake, not just announced capital expenditure. Non-recourse funding generally becomes easier when anchor tenants, land rights, power agreements and construction packages are bankable. Developers should publish phase-level milestones and environmental performance because customers increasingly need evidence for their own resilience and sustainability reporting. ## The milestones that matter now DataVolt’s stated two-to-three-month construction window is the clearest recent sign that the Oxagon AI campus may be moving towards physical delivery. But the project should still be described as planned: the latest public update does not identify customers, confirm first-phase capacity or announce a financing close. The next credible milestones are straightforward—groundbreaking, financing, contracted power, named tenants and energisation. If those arrive, Oxagon could become a major Saudi compute hub. Until then, the useful story is not the 1.5GW headline; it is whether the project can convert energy, capital and customer demand into operating capacity by 2028.