Saudi Arabia, as announced last year, are planning a ‘smart’ super city on the shores of the Red Sea. The megalopolis, according to the initial blueprint unveiled in October last year by Saudi Crown Prince Mohammed bin Salman, will span three nations – Saudi Arabia, Egypt and Jordan. The Times reports today the UK chip maker ARM Holdings are in talks over their technology being a central part of the $500 billion project.
Saudi Arabia’s ambitious Crown Prince plans for ‘Neon’, as the brand new city is intended to be called, to be entirely automated by the latest technology in the world and the world’s first truly ‘smart’ city. It will also have its own legal system independent of the government frameworks of all three countries whose borders it will fall within and cover 10,231 square miles.
The announcement made last year also described how “NEOM will be constructed from the ground-up, on greenfield sites, allowing it a unique opportunity to be distinguished from all other places that have been developed and constructed over hundreds of years.” Construction is to be financed by a combination of Saudi Arabia’s sovereign wealth fund and local and international investors. £500 billion has been pledged by Saudi Arabia.
It would now appear that a UK tech company, ARM Holdings, the Cambridge chip designer that rose to prominence by providing chips for Apple’s iPhone range, could be a key part of the Neon project. If the megalopolis comes to pass, and Saudi Arabia seem determined to make it a reality, it would be spectacular feat. While Dubai and other modern cities in the Middle East have risen out of what was previously desert, Neon would eclipse them all in scale. The plans for Neon would mean the ‘smart’ city covering an area equal to the combined size of Dubai and Slovenia.
The potential ARM involvement was revealed at last week’s Mobile World Congress in Barcelona, where the company’s chief executive commented:
“It’s about using our technology to develop smart cities. It’s a huge project. It’s in a phase where they are looking at all the technologies that could be deployed.”
Discussions are still said to be at an early stage but with the oil rich nation pushing ahead, the first neighbourhoods of the city are planned to be operational by 2025, ARM will be hoping for quick progress. The connection is being aided by the fact that Japan’s Softbank, which acquired the company for £24 billion in 2016, last year sold a 25% stake in the company to its part-owned subsidiary SoftBank Vision Fund. The other major partner in the technology investment fund is Saudi Arabia. The world’s biggest oil producer and exporter has a Vision 2030 project whose goal is to lessen the Gulf nation’s economic dependency on fossil fuels by developing its non-energy private sector.
Despite recording a $200 million loss over the nine months leading up to the end of last year, ARM has recently expanded its employee numbers by 25%. The loss has been explained as an ‘accountancy loss’ resulting from the company being acquired by SoftBank. Another $370 million in write-offs, not included in the company’s most recent results, were recorded intangible assets being taken off the balance sheet following its acquisition. However, the future appears bright for a leading ambassador of British-made technology with ‘connected’ IoT devices moving into the mainstream market in coming years expected to result in a huge increase in demand for its chips. It the Neon partnership is sealed, Arm chips being used to build a fully smart city, one of the biggest in the world, from scratch will be a good start.
Mr Segars, 50, described it as an “accounting loss” linked to Arm going on to SoftBank’s balance sheet but he acknowledged that under its new ownership the group was now focused squarely on a growth agenda. “I’m not expecting to grow by 25 per cent every year,” he said.
The group believes that the spread of connected devices will fuel huge demand for its chips, which are often licensed to third-party manufacturers, such as Intel. “In 2017 our partners shipped 21 billion chips,” Mr Segars added. “The cumulative total is now 125 billion chips.”