Saudi Arabia's Neom megaproject, dubbed "The Line," initially envisioned a linear city spanning roughly 170 kilometers across the desert, designed to house up to 9 million people. However, an internal review has uncovered significant project delays and escalating costs, straining Saudi Arabia's financial resources and prompting officials to reevaluate their strategy. The revised proposal suggests a substantial reduction in the project's scale, with a new emphasis on industrial development. Specifically, the planning team is exploring the possibility of transforming "The Line" into a center for cloud services and large-scale data centers, which would be instrumental in supporting AI training and inference operations.

Although Saudi Arabia is rapidly expanding its AI computing capabilities, the harsh desert climate presents unique challenges for data center operations. Situated near the Red Sea coast, "The Line" offers a potential solution through the use of seawater cooling systems to address temperature control issues. Nevertheless, Saudi Arabia's financial situation has become increasingly strained due to expansive spending and a downturn in oil revenues.

In response, the Neom project has adopted a phased approach to ensure alignment with the nation's evolving priorities. This strategic shift mirrors similar downsizing adjustments seen in other large-scale initiatives across Saudi Arabia, reflecting a broader trend of fiscal prudence and adaptability in the face of economic pressures.