The Line Is Cancelled: Saudi Arabia's $50B NEOM Project Becomes an AI Data Centre

In 2017, Saudi Crown Prince Mohammed bin Salman announced NEOM, a $500 billion megaproject that would build a futuristic city from scratch in the northwestern Saudi desert. The centrepiece was The Line: a 170-kilometre-long, 200-metre-wide, 500-metre-tall pair of mirrored skyscrapers stretching across the desert, housing 9 million people with no roads, no cars, and a 20-minute commute for anyone inside.

It was the most ambitious construction project in human history.

It is now a data centre.

What The Line Was Supposed to Be

The original vision was genuinely extraordinary. The Line would be a linear city powered entirely by renewable energy. An underground transport layer would move people at 170 km/h. The city would eliminate the concept of commuting. Smart sensors would manage everything. There would be no emissions, no inequality, no traffic jams.

Mohamed bin Salman presented it as the blueprint for human civilisation in the 21st century. It was going to house 9 million people by 2030. It was going to prove that a country could be built from scratch on the right principles.

The initial construction budget was $1.5 trillion. Saudi Arabia's Public Investment Fund, the sovereign wealth fund managing the country's oil revenue, was the primary backer.

What Actually Happened

Construction began in 2021. Workers moved into remote desert camps. Concrete foundations were poured. Drilling began.

Then reality arrived.

An internal audit leaked to the Wall Street Journal in 2024 revealed that the actual projected cost was not $1.5 trillion. It was $8.8 trillion. The projected completion date was not 2030. It was 2080.

The cost per resident (if 9 million people somehow moved in) would be approximately $977,000 per person just in construction costs. That does not include operating costs, maintenance, or the infrastructure connecting The Line to Saudi Arabia's existing cities.

Oil prices fell. Saudi Arabia's budget came under pressure. The Public Investment Fund, which had committed to massive investments across Vision 2030 projects simultaneously, began reassessing.

In April 2025, NEOM cut its active construction workforce by 35%. In July 2025, more than 1,000 NEOM employees were relocated from the project site to Riyadh to reduce costs and improve oversight.

On September 16, 2025, the Public Investment Fund formally suspended all construction on The Line until further notice, pending a strategic review.

Fifty billion dollars had been spent. A handful of concrete structures stood in the Saudi desert. Nine million people had not arrived.

The Pivot to AI

The strategic review completed. The answer was not to continue building the city. The answer was to build data centres.

In February 2026, NEOM announced a $5 billion partnership with DataVolt, a sustainable data centre operator, to build an AI data centre campus in NEOM's Oxagon district. Oxagon is the industrial and innovation zone of NEOM, located on the Red Sea coast.

The campus is described as an "AI factory", the term the AI industry uses for facilities specifically designed to run GPU clusters for training and inference workloads, as opposed to general-purpose cloud computing. Phase one, funded by the initial $5 billion investment, is expected to be operational by 2028.

The location logic is simple. An insider quoted by the Financial Times described it: "Data centres need water cooling and this is right on the coast."

The site will use Red Sea seawater for cooling, enabling net-zero operations without fresh water consumption. This is a significant advantage given that Saudi Arabia is one of the driest countries on Earth. Renewable energy from NEOM's solar and wind infrastructure will power the facility.

The Line itself, the 170km mirror-wall structure, will be redesigned into something far smaller, focused on industry and commercial use rather than residential living. The 2045 timeline is now cited for any version of the city concept. The 2080 internal estimate suggests even that is optimistic.

Why This Makes Sense (And What It Says About AI)

The pivot from city to data centre is not as strange as it sounds when you understand what NEOM actually has.

NEOM sits in a region with:

• Abundant solar radiation — 2,900+ hours of sunshine per year
• Direct Red Sea coastline — unlimited seawater for cooling
• Existing construction infrastructure — roads, power lines, workers
• A sovereign wealth fund willing to spend

These are exactly the inputs a hyperscale AI data centre needs. Electricity is the binding constraint on AI infrastructure globally right now. Saudi Arabia can generate cheap solar at scale. The coastal location solves the water cooling problem that is causing power constraints in landlocked US data centre regions.

The $5 billion DataVolt deal is not NEOM's only AI play. Saudi Arabia has committed $40 billion to AI investment through Humain, a new state AI company. Saudi Aramco is building its own internal AI infrastructure. The country is positioning itself as a neutral AI infrastructure hub — serving US companies who cannot easily build in China, and Chinese companies who face restrictions in the US.

For context: Google, Microsoft, and Amazon have all announced Gulf region data centre expansions in the last 12 months. The demand is real — though regional geopolitical risk has complicated that expansion, with Big Tech temporarily closing UAE offices as the Iran conflict escalated in early 2026.

The Human Cost of The Line

Before we fully pivot to infrastructure analysis, it is worth acknowledging what The Line's failure means for the people who were displaced for it.

Saudi Arabia forcibly relocated the Huwaitat tribe from the region where The Line was to be built. Tribal members who resisted were arrested. One man, Abdul Rahim al-Huwaiti, who publicly opposed the forced relocation and refused to leave his ancestral land, was killed by Saudi security forces in 2020. Others received lengthy prison sentences.

The tribe was removed for a city that will not be built.

This context does not appear in most data centre industry coverage. It should.

What Developers Should Know

If you are building AI applications and thinking about where global AI infrastructure is heading, the Saudi pivot matters for three reasons:

New GPU capacity is coming to the Gulf. The $5 billion DataVolt facility at NEOM joins AWS Middle East (Bahrain), Google Cloud Middle East (UAE), and Microsoft Azure Gulf regions. Developers with latency-sensitive applications serving Middle Eastern, South Asian, or East African users will have more options and more competition driving down prices.

Seawater cooling is a real solution to data centre water scarcity. The industry has been struggling with the fact that AI training clusters consume enormous amounts of water for cooling. NEOM's approach — coastal facilities using seawater — is one template. Expect more coastal data centres globally.

Sovereign AI infrastructure is geopolitical. Saudi Arabia, UAE, and other Gulf states are building AI infrastructure as a strategic asset, not just a commercial investment. They are positioning as neutral parties in the US-China AI competition. For AI companies seeking to serve global markets without running into export controls or data sovereignty laws, Gulf infrastructure may become strategically important.

The Line was going to be the future. The data centre running AI workloads in the desert, cooled by the Red Sea, is actually closer to what the future looks like.

Key Takeaways

• $50 billion spent — confirmed Saudi expenditure on NEOM before suspension
• $8.8 trillion projected total — internal audit leaked to Wall Street Journal; completion revised to 2080
• September 16, 2025 — Public Investment Fund formally suspended all Line construction
• 35% worker reduction — active construction workforce cut since April 2025; 1,000+ employees relocated to Riyadh
• $5 billion DataVolt deal — signed February 2026, AI data centre in Oxagon district, operational by 2028
• Red Sea seawater cooling — net-zero operation without fresh water in one of the worlds driest countries
• For developers: Gulf GPU capacity expanding fast — NEOM DataVolt joins AWS Middle East, Google Cloud UAE for latency-sensitive workloads
• What to watch: Saudi Humain AI program ($40B committed) — the real indicator of how deep the Gulf AI infrastructure pivot goes