The Line, a central feature of the Neom megaproject spearheaded by Crown Prince Mohammed bin Salman, is now being scaled back after soaring costs, delays, and growing doubts within the government about whether this ambitious 100-mile project can ever become financially viable.
Neom’s $500 Billion Dream Hits Reality
Neom was introduced as a flagship of Saudi Arabia’s Vision 2030 strategy, designed to be a testing ground for clean energy, advanced living, and tourism, with the goal of reducing the kingdom’s reliance on oil revenue.
At the heart of the vision was The Line, a pair of towering skyscrapers stretching 170 to 200 kilometers across the desert, each standing 500 meters tall. The project was designed with mirrored exteriors and no cars, roads, or conventional streets, offering a car-free urban experience.
The Line was meant to house 9 million residents in a hyper-dense city powered entirely by renewable energy.
However, internal sources report that the bold ambition has met significant financial and practical challenges. By late 2024, it’s estimated that around $50 billion had been spent on Neom, with only a fraction of the original vision materializing on the ground.
Construction on The Line was reportedly halted in late 2024 while the government reassessed its strategy and sought more affordable, flexible designs.
Reevaluating the Vision
The need for a reassessment seems to stem from rising costs and slower-than-expected progress. At an investment conference in Riyadh last November, a senior Saudi official openly acknowledged the strain.
“We rushed at 100 miles an hour. We are now running deficits. We need to reprioritize,” the official stated, reflecting broader concerns about Vision 2030’s capital demands, especially with declining oil prices and mounting financial pressures.
Sources cited by the Financial Times revealed that the Crown Prince now envisions a “far smaller” version of The Line than originally planned. The precise length and population targets are yet to be disclosed, but it seems likely the project will undergo significant reductions rather than being entirely scrapped.
Neom’s Shift Toward Data-Center Hub?
As expectations shift away from a 9-million-resident mega-city, attention has begun to turn toward more targeted and potentially profitable uses for the Neom site.
Reports suggest that Neom may pivot to becoming a major hub for data centers and cloud infrastructure. This move aligns with Crown Prince Mohammed’s public vision of transforming Saudi Arabia into a regional leader in artificial intelligence and advanced computing.
Neom’s vast, undeveloped land, existing energy infrastructure, and strong political support make it a prime candidate for hosting energy-intensive AI data centers. Instead of creating a new urban model from scratch, policymakers could focus on creating a secure, infrastructure-rich zone to attract global tech companies.
What Neom Was Originally Supposed to Offer
The original blueprint for Neom was almost cinematic in scale, with The Line alone promising:
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- A car-free city powered entirely by renewable energy
- 95% of surrounding land preserved for nature
- Vertical layers separating pedestrians, services, and infrastructure
- Embedded smart systems for water, waste, and logistics
- High-speed transport to move residents from end to end in minutes
This ambitious plan was part of a broader Neom region that would include coastal resorts, industrial zones, and research centers, envisioned as a testing ground for robotics, biotech, and green hydrogen.
The First Piece: A Controversial Launch
So far, only one part of Neom has been completed: Sindalah, a luxury yachting resort in the Red Sea aimed at wealthy tourists and yacht owners. The island held its grand opening in October 2024, three years behind schedule and at triple the expected cost. Despite the star-studded launch, with appearances by Will Smith and Alicia Keys, the event did not resonate well with the Crown Prince.
Prince Mohammed reportedly was dissatisfied with the spiraling costs at Sindalah, leading to the dismissal of Neom’s chief executive, Nadhmi al-Nasr. This episode has raised further questions about the effectiveness of Neom’s management and the risk of similar cost overruns affecting other components of the project.
Financial Strain from Oil Revenue Decline
Saudi Arabia’s current financial challenges are not limited to Neom. The kingdom has been grappling with years of heavy spending on infrastructure, defense, and domestic benefits, mostly funded by oil exports.
When oil prices fall, maintaining these commitments becomes more difficult. Analysts suggest that Riyadh now faces a delicate balance between pushing forward with rapid development and avoiding budget deficits that could undermine investor confidence and destabilize the domestic economy.
The Challenges of Building a Futuristic Megacity
Saudi Arabia is not alone in facing trouble with its ambitious city-building projects. From China’s ghost cities to planned capitals in Africa and South Asia, large-scale masterplans often stumble over issues such as real demand, long-term financing, and political patience.
Projects promising millions of future residents need schools, jobs, hospitals, and cultural infrastructure long before they become financially viable. Governments must sustain these efforts without seeing immediate returns, which becomes difficult when financial conditions fluctuate or leadership priorities change.
What a Smaller Line Could Look Like
Several scenarios have emerged regarding what a scaled-back version of The Line might look like. While no official decisions have been made, analysts speculate the following possibilities:
- A smaller initial stretch of The Line, potentially focusing on a core area with tens of thousands of residents
- Phased construction, where each segment must prove commercial viability before proceeding
- A hybrid model that combines high-density clusters with conventional low-rise urban areas nearby
- A stronger focus on logistics and data facilities, with residential components significantly reduced
These changes could lead to a less radical departure from existing cities and more of an experimental district within a broader economic zone.
The Future of Neom: Testing Saudi Arabia’s Ability to Adapt
The direction of Neom will serve as a critical test for Saudi Arabia’s ability to adapt its grand vision to the financial realities of the present. As the project shifts from an urban megacity to a data center hub, it remains to be seen whether this transformation will yield stable long-term revenue or if further adjustments will be necessary to ensure Neom’s success.
For investors, residents, and regional competitors, the unfolding story of Neom will offer valuable insights into Saudi Arabia’s appetite for risk and its ability to execute complex, long-term plans in a rapidly changing global economy.
