DUBAI- Saudi Arabia's futuristic city project NEOM is in talks with companies to pick a lead partner for its first cloud computing deal that will lay the foundation for hi-tech services in its flagship $500 billion business zone, a senior executive said.

The talks with local and international tech firms come after a subsidiary of oil giant Saudi Aramco recently partnered with Google to bring its cloud services to the kingdom, and Saudi Telecom Co. struck a similar deal with Alibaba Cloud.

"From a compute perspective, we're seeing lots of opportunities for partnerships with large, hyper-scale providers," Joseph Bradley, head of technology and digital at NEOM, told Reuters.

"We're in final stages of negotiations with several."

Last year NEOM, which is backed by the $400 billion Saudi sovereign fund PIF, announced a deal with Saudi firm stc group to establish a 5G network for its planned "cognitive" cities.

NEOM's flagship project is a carbon-free zone called The Line. Its construction will begin this year and the first phase will be completed by 2025, Bradley, a former CISCO Systems' executive, said.

The plan, unveiled by Crown Prince Mohammed bin Salman on Jan. 10, is the first major construction project aimed at diversifying the economy of the world's largest oil exporter.

NEOM also plans to build a city-wide operating system based on artificial intelligence in the business zone to better utilise data for its inhabitants.

(Reporting by Saeed Azhar. Editing by Mark Potter) ((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: saeed.azhar.reuters.com@reuters.net))