Saudi Arabia's Mega-City 'The Line' Pivots to AI Data Centers

Planned 170km linear city faces delays, rising costs, and a shift to smaller industrial focus

Jan. 29, 2026 at 8:07pm

Got story updates? Submit your updates here. ›

Saudi Arabia's ambitious Neom project, known as "The Line", was originally envisioned as a linear urban development stretching 170km across the desert to accommodate 9 million residents. However, reports now suggest officials are reconsidering this vision after internal reviews revealed delays, rising costs, and broader fiscal pressure. The revised plan may abandon large-scale residential ambitions in favor of a smaller, industrial focus on cloud hosting and large-scale data centers designed to support intensive compute workloads, particularly for AI training and inference.

Why it matters

This shift reflects Saudi Arabia's growing investment in AI capacity, including the acquisition of thousands of advanced GPUs for state-backed facilities. However, the country's harsh desert climate poses challenges for data center operations, making the coastal access of The Line's location a potential advantage for seawater cooling. The downscaling of the megaproject also highlights Saudi Arabia's tightening liquidity after years of expansive public spending and competing commitments.

The details

Planners are reportedly considering the site as a hub for cloud hosting and large-scale data centers designed to support intensive compute workloads, prioritizing high-density server deployments for AI training and inference over housing or urban services. The coastal access to the Red Sea offers a practical advantage, with planners proposing seawater cooling as a mitigation strategy for the country's well-documented data center cooling challenges.

  • The original concept for The Line was announced in 2017.
  • Internal reviews of the project reportedly revealed delays and rising costs in 2025.
  • The revised plan to pivot The Line to a smaller, industrial focus on AI data centers was reported in January 2026.

The players

Neom

The company behind the ambitious Neom project, which includes the planned linear city known as "The Line".

Got photos? Submit your photos here. ›

What’s next

It remains unclear whether the downscaled data center plan for The Line will reach full capacity, as Saudi Arabia faces tightening liquidity and competing commitments. The country's choice to pause the original megaproject in favor of a smaller, more industrial focus suggests flexibility rather than a firm commitment to the initial scale and timeline.

The takeaway

The pivot of Saudi Arabia's ambitious Neom project, known as The Line, from a sprawling linear city to a smaller, data center-focused industrial hub highlights the country's shifting priorities and the challenges of executing large-scale megaprojects. This shift reflects Saudi Arabia's growing investment in AI infrastructure, but also the practical realities of the country's harsh desert climate and tightening fiscal constraints.