Article contents:
- Introduction: A giant step toward Saudi Arabia’s technological future
- Tripartite partnership details: LG, Shaker, and Datavolt
- Datavolt’s vision: Sustainable, AI-ready data centers
- LG’s role: More than just cooling
- “Global South” strategy: Why the Middle East and Africa?
- Conclusion: A partnership building the Kingdom’s digital future
- Frequently asked questions
Introduction: A giant step toward Saudi Arabia’s technological future
In a move reflecting the Middle East’s growing importance as a global technology hub, LG Electronics (LG) has announced a strategic partnership to provide advanced cooling solutions for the artificial intelligence data center under development in “Oxagon,” the industrial hub of Saudi Arabia’s NEOM. This partnership not only represents a major expansion for LG in the region, but also places it at the heart of one of the world’s most ambitious projects, underscoring Saudi Arabia’s commitment to becoming a global hub for technology and AI.
Tripartite partnership details: LG, Shaker, and Datavolt
The memorandum of understanding was signed in Riyadh between William Cho, CEO of LG; Abdulrahman Abunayyan, Chairman of Shaker Group (the exclusive manufacturer and distributor of LG air conditioners in Saudi Arabia); and Rajit Nanda, CEO of Datavolt, a global data infrastructure provider. Under this agreement, LG will supply advanced thermal management solutions for the next-generation data centers being developed by Datavolt in NEOM.
This step also celebrates the 30th anniversary of the successful strategic partnership between LG and Shaker Group, which has played a pivotal role in shaping the heating, ventilation, and air conditioning market in Saudi Arabia. Mohammed Ibrahim Abunayyan, CEO of Shaker Group, said: “By joining forces with LG and Datavolt, we are driving innovation in advanced, energy-efficient cooling solutions and supporting the Kingdom’s ambition to become a global technology hub.”
Datavolt’s vision: Sustainable, AI-ready data centers
Headquartered in Saudi Arabia, Datavolt specializes in developing hyperscale data centers that integrate renewable energy and alternative fuels. Its flagship project in Oxagon is planned to be one of the largest AI data centers in the region. Rajit Nanda, CEO of the company, stated: “We are building a new generation of net-zero, AI-ready data centers designed for performance, scalability, and sustainability. The partnership with LG allows us to integrate world-class cooling technologies, which are crucial for enabling the digital transformation of governments and enterprises across the Kingdom and beyond.”
LG’s role: More than just cooling
Thermal management (cooling) is a vital component in operating AI data centers, which consume massive amounts of energy and generate high heat. LG views this sector as a new growth engine for its business. By integrating large-scale chillers with coolant distribution units, the company positions itself as a key provider of this critical technology. However, LG’s ambitions do not stop at cooling. It is also developing capabilities to deliver integrated solutions including heat recovery (utilizing waste heat for other purposes) and DC power systems, which can further contribute to data center energy efficiency.
This collaboration also aligns with the “One LG Solution” strategy, which seeks to leverage capabilities across LG Group affiliates, potentially opening doors for battery solutions from LG Energy Solution and data center design, construction, and operation from LG CNS.
“Global South” strategy: Why the Middle East and Africa?
This partnership is part of a broader growth strategy for LG focusing on the so-called “Global South.” CEO William Cho stated: “The Middle East and Africa hold immense potential. The Middle East provides abundant opportunities in both the business-to-government (B2G) and business-to-business (B2B) sectors, driven by government-led industrial restructuring and large-scale development projects.”
Together, the Middle East and Africa account for roughly a quarter of the world’s population and are recognized as regions with strong growth potential. In particular, the Middle East has rushed to diversify its economies away from oil. Non-oil GDP growth in GCC countries is expected to reach 4% this year, the highest in three years. LG’s sales in the region have grown by over 30% over the past five years, underscoring the validity of this strategy.
Conclusion: A partnership building the Kingdom’s digital future
The partnership between LG and Datavolt at the heart of the NEOM project is more than just a business deal; it is a testament to the economic and technological transformation underway in Saudi Arabia. By bringing the latest global technologies to support its AI ambitions, the Kingdom is not only building smart cities, but also constructing a sustainable digital economy for the future. This move establishes LG as a key partner in this vision, reinforcing its standing in one of the world’s fastest-growing markets.
Frequently asked questions
Q1: What is the NEOM and Oxagon project?
A1: NEOM is a massive futuristic city project being built by Saudi Arabia on the Red Sea coast. Oxagon is a floating industrial city within NEOM, designed to be a center for advanced manufacturing, research, and innovation.
Q2: Why are cooling solutions so important for AI data centers?
A2: AI operations require immense computing power, generating massive amounts of heat. Without efficient and continuous cooling, servers can overheat and fail, leading to service outages and data loss. Effective cooling is essential for performance and reliability.
Q3: What is LG’s “Global South” strategy?
A3: It is a strategy focusing on growth in emerging and high-potential markets across Asia, the Middle East, Africa, and Latin America, as an alternative to saturated traditional markets in North America and Europe.
Q4: How does this partnership support Saudi Vision 2030?
A4: The partnership directly supports Vision 2030 goals by attracting foreign investment, transferring advanced technology, developing the digital infrastructure necessary for a knowledge-based economy, and diversifying the economy away from oil.
