Saudi Arabia is spending billions of dollars winding down contracts at Neom, the futuristic desert megacity that Crown Prince Mohammed bin Salman launched in 2017 as the centrepiece of his plan to modernise the kingdom's economy. More than $50 billion has already been sunk into the project, leaving partially built structures in the desert as the kingdom quietly retreats from its most ambitious construction venture.
The Public Investment Fund (PIF), Saudi Arabia's sovereign wealth fund, signalled the shift in its 2025 annual report. The report states that Neom's delivery model has "evolved toward phased implementation and commercially driven prioritisation to ensure progress is measurable, resilient and financially sustainable over time." In practice, that means a pivot away from spectacle and toward artificial intelligence data centres, logistics, and clean energy.
Neom was conceived as a $500 billion technology city spanning an area roughly the size of Belgium along the Red Sea coast. Cost estimates have since ballooned to as much as $8.8 trillion, a figure that underscored the project's implausible economics long before the formal retreat began.
The most visible casualty is The Line, a proposed 170-kilometre linear city that was Neom's centrepiece. Workers have been leaving the site over the past year. Construction has reportedly been halted until after 2030. It is unclear whether any portion of The Line will be salvaged using the infrastructure already in place.
Saudi Arabia has also withdrawn from hosting the 2029 Asian Winter Games. The event had been scheduled at Trojena, an unfinished mountain resort within the Neom zone designed to use artificial snow. The withdrawal removed one of the few fixed public deadlines that had been keeping parts of the project on a defined schedule.
Leadership inside Neom has changed sharply. The project's previous director was dismissed in October 2024, shortly after a glitzy launch party for Sindalah, a $4 billion Red Sea island development that is currently closed. His successor, Aiman al-Mudaifer, launched a spending review. Consultants across the project, including lawyers, engineers, and project managers, have since been cut by as much as 90 per cent, according to the Observer.
The foreign investment Saudi Arabia had counted on to fund Neom never arrived at the scale the kingdom anticipated. The BBC has reported that the influx of outside capital the project depended on failed to materialise to the expected degree. That shortfall, combined with a drop in oil revenues and what the Wall Street Journal has described as deep-seated mismanagement, proved fatal to the original vision.
Neom was always more than a construction project. It was the most prominent symbol of Vision 2030, Crown Prince Mohammed bin Salman's programme to reduce Saudi Arabia's dependence on oil and attract global business and talent. How the contraction of the project will affect that broader programme over time remains unclear.
What Neom becomes next is still taking shape. The PIF has indicated that priority sectors will include AI infrastructure and clean energy. Whether any of the project's more ambitious sub-developments, among them Oxagon, Magna, and the Islands of Neom, will be built or quietly abandoned has not been disclosed.
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