Beyond the Mirage: Why the Rumours of NEOM’s Death Are a Dangerous Misreading of the Future

As whispers of failure surround Saudi Arabia’s giga-project, the real story is not one of collapse, but of a crucial, painful, and necessary evolution. For project professionals, NEOM is the ultimate case study in the collision of ambition, reality, and artificial intelligence.

In the hyper-caffeinated world of technology news, failure is a far more seductive narrative than evolution. It is therefore no surprise that recent reports of scaled-back ambitions and suspended work on Saudi Arabia’s NEOM giga-project have been seized upon as proof of its demise. Headlines have gleefully declared the $500 billion desert utopia is “grinding to a halt,” buried under a mountain of delays and cost overruns. The story is simple, dramatic, and perfectly tailored for a cynical age. It is also dangerously inaccurate.

From the Project Flux perspective, the claim that NEOM has been halted is a fundamental misreading of the situation. Yes, the project is facing the brutal headwinds of reality. The initial vision for “The Line”—a 170km-long mirrored skyscraper housing nine million people—has been revised to a more modest, though still monumental, goal of housing fewer than 300,000 residents by 2030. Costs have escalated astronomically, with some estimates now placing the total price tag in the trillions, not billions. And yes, work has been suspended on certain parts of the project as the kingdom recalibrates its financial commitments. But to mistake this recalibration for a collapse is to miss the entire point. NEOM is not failing; it is being forged in the crucible of real-world constraints. And for anyone involved in the delivery of large-scale, technology-driven projects, the lessons being learned in the Saudi desert are invaluable. It is precisely because of these challenges that the project must continue, as it serves as a vital, real-world flagship for what projects with immense technical capability can, and cannot, achieve.

The AI at the Heart of the City

The narrative of NEOM’s struggles has been amplified in AI-focused newsletters for a specific reason: NEOM was never just about building a city. It was about creating the world’s first truly AI-powered society. The entire concept is predicated on a seamless integration of artificial intelligence into every facet of urban life. From AI-powered infrastructure management and autonomous transportation systems to robotic construction and AI-driven urban planning, NEOM represents the most ambitious attempt in history to build a city on a foundation of code and algorithms.

This is why major technology players have such a vested interest in its success. SoftBank, a key investor in Saudi Arabia’s Vision 2030, is pursuing a strategy it calls “Physical AI”—the fusion of artificial intelligence with robotics. Its multi-billion-dollar acquisition of ABB Robotics and its investment in OpenAI’s Stargate project are pieces of the same puzzle. NEOM is the intended playground for these technologies, the place where the theoretical power of AI meets the physical world at an unprecedented scale. The scaling back of the project has, therefore, sent shockwaves through the AI start-up ecosystem, where many companies had staked their futures on securing contracts to build out NEOM’s AI-driven infrastructure. The project’s troubles serve as a sobering reality check on the challenges of deploying futuristic AI applications, and a stark reminder of the risks involved in depending on state-backed mega-projects.

A Necessary Reckoning

While the rumours of a complete halt are inaccurate, the challenges are undeniable. The Sindalah island resort, one of NEOM’s key components, was completed in 2024, but it was three years behind schedule and at triple its initial cost. This is a story familiar to any seasoned project professional. Ambitious visions inevitably collide with the messy realities of execution, supply chains, and budgets. What makes NEOM different is the sheer, breathtaking scale of that collision.

“It’s really important that this project does continue as it’s a flagship for what projects with technical capability can do.” - Project Flux

This is precisely why the project is so important. In a world where so much of the discussion around AI is theoretical, NEOM is a live, high-stakes experiment. It is testing the limits of our ability to plan, manage, and execute projects of unimaginable complexity. It is forcing a global reckoning with the true costs and challenges of building the AI-powered future that so many are quick to promise. The scaling back of ambitions is not a sign of failure, but a sign of learning. It is a pragmatic response to the realities of what is possible, a necessary adjustment in the face of overwhelming complexity.

The Future is Built, Not Decreed

The story of NEOM is a powerful antidote to the simplistic hype that often surrounds artificial intelligence. It demonstrates that vision is not enough. Execution is everything. For project delivery professionals, the lesson is clear: our role is more critical than ever. As the world embarks on ever more ambitious, technology-driven projects, the need for skilled professionals who can navigate the treacherous terrain between vision and reality will only grow.

We must watch NEOM not with cynicism, but with a critical and engaged eye. It is the boldest project of our time, and its successes and failures will define the future of project delivery for a generation. It is a reminder that the future is not something that is simply decreed by visionaries; it is something that is built, painstakingly and with great difficulty, by those who are willing to grapple with the messy realities of execution.

The mirage may be fading, but the city is still being built. The future of project delivery is being defined today in the sands of Saudi Arabia. Are you prepared for the lessons it will teach us?

References

[1] Intelligence Online. (2025, October 14). End of The Line? Saudi's Neom mega-project grinds to halt. https://www.intelligenceonline.com/international-dealmaking/2025/10/14/end-of-the-line-saudi-s-neom-mega-project-grinds-to-halt,110533731-eve 

[2] Bloomberg. (2024, April 10). End of the Line? Saudi Arabia ‘forced to scale back’ plans for 105-mile-long desert megacity. https://www.theguardian.com/world/2024/apr/10/the-line-saudi-arabia-scaling-back-plans-105-mile-long-desert-megacity-crown-prince 

[3] CNBC. (2025, July 18). Saudi Arabia’s ‘The Line’ at Neom is reviewed as it considers its megaprojects. https://www.cnbc.com/2025/07/18/saudi-arabias-the-line-at-neom-is-reviewed-as-it-considers-its-megaprojects.html 

[4] Forbes. (2025, October 19). SoftBank’s Physical AI Dream Meets Saudi Reality.