RIYADH: Saudi Arabia’s NEOM has stopped further construction on The Line, the 170-kilometer pair of mirrored skyscrapers once projected to cost more than $1 trillion, and will not resume work until at least after 2030. The decision came out of a strategic review led by NEOM CEO Aiman Al-Mudaifer and was first reported by Semafor on May 22, 2026. The Public Investment Fund, chaired by Crown Prince Mohammed bin Salman, is shifting roughly $3 billion of NEOM spending into Oxagon, an industrial city and Red Sea port now being repositioned as an AI infrastructure hub.
How a $1 Trillion Megaproject Got Folded Into the AI Build-Out
The Line was the centerpiece of Saudi Vision 2030, sold as a car-free linear city stretching from the Red Sea coast to the desert. After roughly seven years of work, contractors have laid only about 2.4 kilometers of foundation, according to reporting by Engineering News-Record. The 2030 population target, originally pitched at 1.5 million residents and later trimmed to 300,000, has now been cut to roughly 100,000.
Al-Mudaifer was appointed permanent CEO in May 2025 after replacing Nadhmi Al-Nasr, and he launched the strategic review almost immediately. NEOM also stood up a new chief of staff division to tighten PIF oversight and relocated more than 1,000 staff from the project site to Riyadh, a move framed as a cost-control measure. The Line halt is the most consequential outcome of that review so far. Contracts already in place at the site, including $8.45 billion in deals reported as terminated, are being unwound or renegotiated as PIF retrenches.
The pullback is not isolated. PIF has postponed Red Sea coast tourism development past 2030, paused Trojena (the mountain resort meant to host the 2029 Asian Winter Games), cut LIV Golf funding earlier in May after $5 billion in losses, and stalled the Mukaab cube project in Riyadh. Saudi Arabia just posted its largest quarterly budget deficit since 2018, driven by spending tied to the Iran war and a slowing oil market. The Trojena halt and The Line halt together signal a broader rule change inside PIF: showpiece projects with no near-term cash flow now lose the funding fight against infrastructure that can be leased to paying tenants.
What does NEOM’s pivot mean for the global AI infrastructure race?
The Line is being shelved because compute pays and vanity cities do not. By redirecting roughly $3 billion to Oxagon, Saudi Arabia is buying a seat at the hyperscaler table, betting AI firms will lease power and rack space faster than tourists arrive. The kingdom now wants to be a landlord to the compute economy.
The numbers tell the story. NEOM signed a $5 billion partnership with DataVolt in February 2026 for a 1.5-gigawatt AI data center campus at Oxagon, with phase one a 300-megawatt facility targeting 2028 operational readiness, per Datacenter Dynamics. Additional capacity tied to Elon Musk’s xAI venture and the Saudi AI vehicle Humain pushes Oxagon toward gigawatt-scale by the end of the decade. The site sits next to a deepwater port, has dedicated power, and benefits from Saudi tax and energy subsidies that U.S. operators cannot match.
For founders, the read-through is direct. State capital is following the same playbook as private capital: skip the speculative consumer story, fund the picks-and-shovels layer. Sovereign wealth funds with effectively unlimited runway are still folding their most ambitious visions into the AI build-out, mirroring moves like the recent $2 billion U.S. equity stake in nine quantum firms and the demand signal coming from rounds like Anthropic’s $900 billion valuation. Capital is voting for compute, not concepts.
What to Watch Next
NEOM has not published a formal statement on The Line’s halt, and the strategic review’s full conclusions remain unreleased. Expect a phased rollout: clarification on which Line contractors will be paid out, an updated Vision 2030 milestone schedule, and a more detailed Oxagon investment plan in the second half of 2026. The DataVolt phase-one 300MW facility is the next concrete milestone, with operational targets in 2028.
Watch for follow-on hyperscaler deals. Saudi Arabia has been openly courting OpenAI, Anthropic, and other frontier model labs for compute partnerships, and Oxagon is now the front door. Watch, too, for how PIF balances domestic AI ambitions through Humain against the kingdom’s track record of underwriting flagship projects like SpaceX’s $60 billion Cursor acquisition at the infrastructure layer. The DataVolt facility is designed to run on renewable power with closed-loop cooling, and Saudi officials have positioned it as net-zero from day one, a pitch aimed directly at AI buyers facing power constraints in the U.S. and Europe.
The signal for founders is that the AI compute market is now deep enough to absorb sovereign capital at trillion-dollar scale. If Oxagon hits its 2028 milestones, the lesson will be that even a $1 trillion vision can be quietly rewritten when the economics no longer pencil. Watch the next earnings cycle from PIF, the timing of any Humain-OpenAI or Humain-Anthropic announcements, and whether NEOM’s 2030 population target moves again. A second downgrade would close the chapter on The Line as a city and confirm Oxagon as the project’s new center of gravity.
