NEOM Hits Fiscal Gravity: Saudi Arabia Halts 'The Line' and Slashes Its 2030 Dream

For nearly a decade, NEOM was the most extravagant promise in global development: a $500 billion zone in Saudi Arabia's northwest desert anchored by 'The Line', a pair of mirrored skyscrapers stretching 170 kilometres across the sand, projected to house millions of people with no cars, no roads and no carbon emissions. In 2026, that vision is colliding with fiscal reality.

According to reporting by Semafor, NEOM has halted further work on The Line until after 2030 and will significantly redesign its twin skyscrapers to make the project cheaper to build. The decisions flow from a strategic review led by NEOM's new chief executive, Aiman al-Mudaifer, who took over the project last year. It is the clearest signal yet that Saudi Arabia's signature giga-project is being quietly rewritten rather than realised.

What NEOM and The Line promised

When Crown Prince Mohammed bin Salman unveiled NEOM in 2017 and The Line in 2021, the rhetoric was civilisational. NEOM officials initially envisioned roughly 1.5 million residents living in the zone by the end of the decade, en route to 9 million by 2045. The Line alone was meant to be a 200-metre-wide, 500-metre-tall ribbon of glass — a city you could cross end to end by high-speed rail in 20 minutes. Independent estimates put the full cost above $1 trillion.

The reality check

The numbers have moved sharply in the opposite direction. As Euronews and The New Arab have documented, the 2030 population target for The Line was already cut from 1.5 million to about 300,000 two years ago. Semafor now reports that the strategic review has lowered the whole zone's 2030 target again to as few as 100,000 people — a fraction of the original ambition.

The retrenchment is broad. Plans to develop tourism destinations along NEOM's Red Sea coast have been pushed back until after 2030. Trojena, the mountain resort earlier slated to host the 2029 Asian Winter Games, will receive no new investment until after 2030 either. By the time work paused, only a small stub of The Line's foundations had been excavated against the 170-kilometre plan.

PIF and budget pressure

The trigger is money. Oil prices have stayed subdued, and the Public Investment Fund — NEOM's parent — has been forced to ration capital across a crowded portfolio of giga-projects it can no longer fund simultaneously. Saudi Arabia's 2026 budget projects a deficit of 3.3% of GDP, down from 5.3% in 2025, with Riyadh planning to run deficits through 2028 by policy choice.

Finance Minister Mohammed al-Jadaan made the new posture explicit at a December 2025 budget briefing, telling reporters, as quoted by Middle East Eye: "We have no ego, absolutely no ego. If we announce something and we need to adjust it, accelerate it and make it a priority more than others, or defer or cancel it, we will without blinking." The IMF welcomed the recalibration of Vision 2030 spending, framing it as overdue discipline rather than retreat.

The pivot to ports, utilities and AI

NEOM is not being abandoned — it is being repositioned around things that generate near-term revenue. Roughly $3 billion is being redirected to OXAGON, NEOM's industrial port-city, with a focus on its Red Sea port, utilities and data connectivity. The strategy now favours, in officials' words, more "immediately practical, productive" infrastructure — ports, power and data centres aimed at courting global AI firms hungry for energy and land.

That pivot mirrors a wider Gulf bet: the UAE and Qatar are racing to host AI compute, and Saudi Arabia's state-backed venture Humain is positioning the kingdom as an AI-infrastructure hub. Trading a futuristic skyline for server farms is less photogenic, but it aligns NEOM with where capital and demand actually are.

What it says about Gulf diversification

NEOM's downsizing is the definitive "Vision 2030 meets fiscal gravity" story. It shows that even the wealthiest petrostate cannot indefinitely subsidise prestige architecture against soft oil and a strained sovereign fund. The reframing — from a $1 trillion utopia to a leaner industrial and digital play — suggests Gulf diversification is maturing from spectacle toward economics. Whether that produces a sustainable post-oil economy, or merely a more modest set of unfinished ambitions, will be the real test of the decade.