Saudi Arabia trims Neom project amid financial pressure and shifting priorities

Saudi Arabia trims Neom project amid financial pressure and shifting priorities (File image)

• Saudi Arabia to scale back Neom, shifting to a smaller, pragmatic development
• The Line city concept to be redesigned, abandoning the original linear vision
• Neom may prioritize data centers, AI, and economically beneficial projects.

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Saudi Arabia is preparing to significantly scale back Neom, the futuristic development that has stood at the centre of Crown Prince Mohammed bin Salman’s economic transformation plans.

People familiar with the review process say the kingdom is now looking at a much smaller and more pragmatic version of Neom, marking a quiet acknowledgment that the original vision was too ambitious, too expensive and too difficult to execute on the timeline promised, the Financial Times reported.

From bold vision to pared-down reality

Launched in 2017, Neom was billed as a once-in-a-generation project: a vast development along the Red Sea coast, roughly the size of Belgium, designed to showcase a post-oil Saudi economy powered by technology, tourism and clean energy.

Its most eye-catching centrepiece, The Line, was envisioned as a 170-kilometre-long linear city cutting through desert and mountains. Over time, that vision has steadily shrunk. Now, according to people briefed on the matter, The Line is likely to be redesigned into something far more modest, using infrastructure already built rather than expanding aggressively.

Architects are said to be working on an entirely different concept, one that abandons the idea of a continuous linear city in favour of more conventional development.

Financial pressure forces a rethink

The review comes as Saudi Arabia faces tighter financial conditions after a decade of heavy spending. Oil prices have softened, liquidity has tightened and the government is juggling multiple expensive commitments, including preparations for the 2030 World Expo and the 2034 football World Cup.

Neom, once treated as untouchable, is no longer immune. Officials are now weighing what can realistically be delivered without putting further strain on public finances.

The project’s main backer, the Public Investment Fund, which controls close to $1 trillion in assets, is also under pressure to show returns and rein in spending across its sprawling portfolio of megaprojects.

A pivot toward data and AI

Rather than abandoning Neom altogether, Saudi planners appear to be repositioning it.

One emerging focus is turning parts of the development into a hub for data centres, aligning with the kingdom’s push to become a major player in artificial intelligence. Neom’s coastal location offers access to seawater cooling, while its renewable energy plans could support energy-hungry computing infrastructure.

Saudi officials say the revised strategy reflects a more phased, market-driven approach, prioritising projects with clearer economic payoffs rather than headline-grabbing concepts.

Setbacks pile up

Signs of strain have been visible for some time. Work slowed after Neom’s long-serving chief executive stepped down late last year, triggering a comprehensive review of priorities under new leadership.

The ski resort Trojena, another Neom sub-project, has already been downsized, and Saudi Arabia recently announced it would no longer host the Asian Winter Games there as originally planned.

Once a magnet for consultants, architects and construction firms, Neom has increasingly become a symbol of the risks of overreach.

Adjusting the vision, not abandoning it

Saudi officials insist the scaling back does not represent a retreat from reform. Instead, they frame it as a course correction.

Prince Mohammed has publicly said he is willing to cancel or radically alter projects if they no longer serve the public interest. The Neom redesign appears to be the clearest example yet of that philosophy being put into practice.

The result is likely to be a Neom that is less futuristic, less spectacular and far smaller than promised — but also one that stands a better chance of being completed.

In that sense, the project’s transformation may say as much about Saudi Arabia’s evolving economic priorities as it does about the limits of megaproject ambition.