At dawn, the desert north of the Red Sea may appear oddly silent. Stretching toward far-off mountains is pale sand. Occasionally, a half-built highway is traversed slowly by construction trucks. And rising from that terrain were dozens of cranes working on what Saudi Arabia believes will be the most advanced city in the world.
This is NEOM, the focal point of Saudi Arabia’s self-reinvention effort. The project alone will cost almost $500 billion. AI-managed infrastructure, vertical cities, and whole districts powered by renewable energy are all promised by futuristic designs. It’s difficult to ignore the scope of the project when standing close to the construction site. and the danger.
| Category | Details |
|---|---|
| Country | Saudi Arabia |
| National Strategy | Vision 2030 Economic Transformation Plan |
| Key Institution | Public Investment Fund (PIF) |
| Major Project | NEOM Smart City ($500 Billion) |
| Target | Become a global AI and tech hub by 2030 |
| Data Infrastructure Goal | 6 Gigawatts of data capacity by 2034 |
| Reference Source | https://www.vision2030.gov.sa |
Oil was Saudi Arabia’s main source of power in the world for almost a century. The kingdom became the dominant force in OPEC and one of the world’s most significant energy exporters thanks to thick rivers of crude that flowed beneath the desert. However, the leadership now seems to be more conscious of the fact that oil’s hegemony won’t last forever.
Saudi Arabia’s ambitious $2 trillion economic transformation plan, Vision 2030, aims to alter that reality. Crown Prince Mohammed bin Salman is in favor of the plan, which seeks to diversify the economy away from fossil fuels. The core of that strategy is technology. advanced computing, data infrastructure, and artificial intelligence. Twenty years ago, the kingdom hardly participated in entire sectors.
Investors appear interested. They are cautious, though. The kingdom’s Public Investment Fund, often referred to simply as PIF, has become one of the most aggressive sovereign investors in the world. The fund, which has assets close to $1 trillion, has invested billions in infrastructure projects, gaming studios, sports leagues, and technology firms.
According to reports, PIF deployed over $30 billion in dozens of transactions in 2023 alone. There is a sense that Riyadh is attempting to quickly create a new identity as one strolls through the city’s new financial district today, where the skyline is full of glass towers and still smells slightly of fresh concrete.
Artificial intelligence is one of the main areas of interest. Saudi officials have made it clear that they want to be the world’s third-largest AI power. The kingdom is making significant investments in data centers and computing power to help achieve that objective. Major tech firms like Nvidia, Amazon Web Services, AMD, Qualcomm, and Cisco have formed partnerships.
By 2034, plans are in place to construct data infrastructure with a capacity of about six gigawatts. That is a significant amount of processing power. For comparison, many countries are only beginning to build the digital infrastructure required for large-scale AI development.
However, ambition and execution are rarely synonymous. Saudi Arabia’s transformation is still largely funded by oil earnings. Crude exports continue to be the main source of funding for the country even as non-oil revenue increases. Additionally, the strain is evident when oil prices decline. Recent years have already seen budget deficits, which have forced the government to take on debt in order to continue big projects.
The kingdom may view this as a calculated risk. After all, the money required to try such a transformation in the first place comes from oil wealth. Few countries have the financial resources to develop completely new cities, spend tens of billions on technology infrastructure, and grow the tourism, mining, and entertainment industries all at once.
It is nearly impossible to understand the experiment’s scope. Think about the larger ecosystem of Vision 2030. In addition to NEOM, the government is making significant investments in Red Sea tourism projects, international football clubs, golf tournaments, and large entertainment complexes to encourage Saudi nationals to spend their money domestically rather than overseas.
Additionally, the reforms are being pushed forward by demographic pressure. Due to the country’s youthful population, many young Saudis are joining the workforce in search of opportunities outside of traditional government employment.
It appears that the leadership is aware of the risks as this develops. The Gulf itself has turned into a sort of low-key rivalry. Dubai and Abu Dhabi have already been established by the United Arab Emirates as centers for global startups, AI, and finance. Qatar has made significant investments in sports facilities and education. With its much larger population and oil wealth, Saudi Arabia seems determined to keep up.
Skeptics still exist, though. Building a technology ecosystem, according to some economists, takes more than just money. It requires culture. Top engineers are produced by universities. risk-taking entrepreneurs. legal structures that safeguard intellectual property and promote innovation.
The infrastructure can be built with money. It’s unclear if it can create a startup culture overnight Questions are raised by the projects themselves. Discussions concerning schedules and viability have been sparked by satellite photos of NEOM construction. The proposed 170-kilometer linear city known as “The Line” is one of the early plans that sounds almost like science fiction.
However, Saudi Arabia has previously taken observers by surprise. The kingdom has already undergone a transformation from a sparsely populated desert economy to the global leader in energy. Decades and a great deal of geological luck were required for that change. Something more difficult to engineer will determine the next transformation.
