The kingdom’s headline-grabbing Neom project, once billed as a 100-mile-long desert megacity, is now facing a sharp rethink. Officials and advisers say the government is cutting back the scope of its most famous component, The Line, after cost overruns, delays and growing anxiety over budgets.
The futuristic desert city that stalled
Neom was launched with fanfare as the centrepiece of Crown Prince Mohammed bin Salman’s Vision 2030 strategy. The plan aimed to wean the country off oil by pouring money into tourism, technology and real estate on a breathtaking scale.
At the heart of it sat The Line: a city formed by two parallel skyscrapers, 500 metres high, running for roughly 170 to 200 kilometres across the desert. Renderings showed razor-straight mirrored walls cutting through mountains and sand, with residents living in stacked neighbourhoods powered by clean energy.
The Line was supposed to welcome up to 9 million residents. There would be no roads, no private cars and, according to official promises, no emissions. A high-speed rail spine would move people from end to end in as little as 20 minutes.
The Line was pitched as a $500bn, car-free, emissions-free urban revolution stretching for 100 miles across the desert.
On paper, it was due to be largely finished by 2030. On the ground, the reality has been very different.
Billions spent, expectations shrinking
According to people briefed on the project, the crown prince now backs what one senior figure described as a “far smaller” version of The Line. Estimates cited in financial reporting suggest around $50bn has already been spent on Neom by late 2024, a huge sum in a relatively short period.
The original $500bn forecast for The Line itself is increasingly seen as unrealistic for the current fiscal climate. While the new scale has not been publicly confirmed, insiders say early ambitions have been quietly shelved as ministries push to rein in deficits.
At a major investment conference in Riyadh in November, a Saudi official bluntly acknowledged the problem. The government, he said, had moved “at 100 miles an hour” and now needed to “reprioritise” after overspending.
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Senior officials admit the state “spent too much” and must now decide which parts of the megacity dream still make sense.
Construction on sections of The Line reportedly slowed or paused late last year while planners reviewed the next steps. That pause has now morphed into a wider rethink of Neom’s entire role in Saudi Arabia’s economic overhaul.
From sci‑fi city to data and AI hub?
Sources quoted in local and international outlets say Neom may pivot away from trying to build an instant mega-metropolis and move towards becoming a cluster for data centres and artificial intelligence infrastructure.
This would match a broader push from Riyadh. The leadership wants Saudi Arabia to become a heavyweight in AI, using cheap land, abundant capital and access to energy to attract global tech firms.
How Neom’s focus could shift
- Less emphasis on a continuous 100-mile city
- More investment in high-capacity data centres
- Targeted zones for AI research and cloud computing
- Selective tourism sites rather than a fully built megacity
One person familiar with the discussions said it is not clear whether The Line will survive at all as a shrunken project or be reduced to a short demonstration segment rather than a full-length city. For now, officials are recalibrating what can realistically be built within budget and time constraints.
Oil prices, deficits and political pressure
Saudi Arabia’s grand transformation depends heavily on oil revenues, even as the state tries to move beyond them. Lower-than-hoped-for oil prices and years of rapid spending have strained the public finances, forcing a rethink of mega-project timelines.
Running deficits while paying for multiple vast schemes at once has become politically sensitive. The leadership needs Vision 2030 to show visible, credible progress by the end of the decade, not just glossy architectural renders.
That pressure has reportedly led to tension at the top. Prince Mohammed is said to be increasingly frustrated with construction delays and shifting targets at Neom. The sense in Riyadh is that some early promises were simply too ambitious, even for a wealthy petrostate.
A luxury island that failed to impress
So far, only one part of Neom is truly open: Sindalah, a luxury yachting resort in the Red Sea. It finally held a full “grand opening” in October 2024, three years later than planned and at roughly three times the original budget.
The launch party, featuring stars such as Will Smith and Alicia Keys, was designed to signal that Neom was moving from blueprint to reality. Instead, insiders say it reinforced concerns about overspending and weak execution.
Despite celebrity performances and a glittering marina, Sindalah reportedly left the crown prince unimpressed and triggered a leadership shake-up.
Shortly after the event, Neom’s chief executive, Nadhmi al‑Nasr, was dismissed. The move was read by many observers as a sign that the leadership wants tighter control and more discipline over how Neom is run.
The promise and risk of building from scratch
The Line captured global attention because it promised to tear up the standard playbook of urban planning. Instead of roads spreading outward, everything would be stacked vertically in a narrow corridor. Services, transit and housing would sit within walking distance. Nature, according to the pitch, would take back most of the surrounding land.
Yet building an entirely new urban model from scratch brings enormous risks:
| Issue | Risk for The Line |
|---|---|
| Cost control | High upfront construction costs and complex engineering can spiral quickly. |
| Technology reliance | Heavy dependence on unproven smart-city systems raises reliability questions. |
| Population demand | Attracting millions of residents to a remote desert site is uncertain. |
| Environmental impact | Large-scale building in sensitive desert ecosystems can damage habitats. |
Officials originally promised 100 per cent renewable energy and protection of 95 per cent of surrounding land. Delivering that alongside massive construction work and heavy data centre power use will be technically challenging.
What a smaller Neom could look like
If Saudi planners choose a more modest route, Neom may evolve into a patchwork of specialised hubs rather than a single megastructure. A plausible scenario is a short, built-out section of The Line as a proof of concept, ringed by logistics, technology and tourism zones that can expand slowly based on demand.
For the government, a scaled-back Neom still carries strategic value. It offers a test bed for AI regulation, green energy pilots and new housing models, without the same financial shock of a 100-mile skyscraper corridor. International investors may even prefer a version that looks less like science fiction and more like a high-tech business park with ambitious design.
Key terms and context
Vision 2030 is Saudi Arabia’s flagship reform plan, launched in 2016. It aims to reshape the economy by boosting private-sector activity, tourism, entertainment and manufacturing, while upgrading infrastructure and public services.
Neom sits inside that programme as a “giga-project”, a category reserved for vast developments backed directly by the sovereign Public Investment Fund. These projects carry both prestige and risk. Success could recast the country’s global image; failure would raise doubts over its model of state-led transformation.
For residents of the kingdom and investors abroad, the downscaling of The Line sends a mixed signal. On one hand, it suggests the leadership is willing to adjust when costs mount. On the other, it shows that even in a cash-rich state, pushing urban experimentation to the extreme can hit hard financial and practical limits.
Originally posted 2026-03-05 01:48:00.