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In today’s big story, Saudi Arabia’s futuristic city, which is part of its big modernization plans, just got another reality check.
What’s on deck:
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The big story
A broken vision
Saudi Arabia’s dreams of the future are facing the realities of the present.
The CEO of the Kingdom’s futuristic city, Neom, abruptly stepped down after six years in the role. It’s another setback for the country’s ambitious Vision 2030 plan to diversify its economy away from relying on oil and make it an attractive tourist destination.
Neom is arguably the most high-profile portion of Crown Prince Mohammed bin Salman’s plan. Even if you haven’t been closely following the project, you’ve likely seen mockups of the twin mirrored skyscrapers dubbed “The Line” that look like a massive wall running through the desert.
But Neom is having an “Instagram vs. reality” moment … literally. Influencers and vloggers who posted videos of their lives in the yet-to-be-completed city were mostly mocked in what one viewer described as having “low security prison vibes.”
Grand plans also don’t come cheap. Estimates for Neom have swelled to as much as $1.5 trillion. Saudi has already invested $1.3 trillion in the wider Vision 2030 project.
Foreign investments in the plan haven’t panned out the way Saudi hoped either, leading the Kingdom to look to China for help with the bill. The move is part of the deepening financial ties between the two countries, which poses a potential threat to the US.
Saudi Arabia’s big plans also include tech’s biggest prize: AI.
The Kingdom has spent years investing billions in the tech, including the recent creation of a $40 billion fund dedicated to AI investments.
But it’s also looking to develop the tech in its home country, writes BI’s Hasan Chowdhury. Saudi Arabia’s approach to AI isn’t unlike the role it plays as an energy giant: Provide the fuel others rely on to make their projects go.
“Project Transcendence” includes building all-important data centers in the country and serving as the Middle East AI hub for tech giants. AWS has already committed more than $5 billion to building data centers in the country.
It’s not alone, though. The United Arab Emirates is aiming to be the AI leader in the region by 2031.
News brief
Top headlines
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- Trump’s big plans for the oil industry might not be possible. ExxonMobil CEO Darren Woods said the market is well supplied with oil and there’s not much of an opportunity to up production in the near term. Energy analysts also said oil majors are focused on returning money to shareholders rather than investing in projects that’ll boost production.
3 things in tech
- Silicon Valley’s getting redder, and it’s not just the billionaire backers. In the three Bay Area counties that make up the epicenter of America’s tech hub, Donald Trump made small but significant gains with voters. Though the valley is still a long way from a Republican majority, the data shows a clear shift toward Trump over the past three elections.
- A chip match made in heaven. Amazon Web Services is negotiating a huge deal to supply IBM with Nvidia GPUs via its cloud, according to an internal document obtained by BI. The potential deal could expand the partnership between IBM and AWS in the AI space.
- Intel is struggling to become America’s chipmaking powerhouse. US officials are counting on Intel to lead the country’s chip manufacturing resistance. Strategic missteps, layoffs, and the company’s worst quarter ever contributed to a perfect storm that slowed progress.
3 things in business
- It’s official: Elon Musk has a role in Trump’s future administration. Musk and businessman Vivek Ramaswamy are set to lead a new Department of Government Efficiency — “DOGE” — under the president-elect. In a statement on Tuesday, Trump said Musk and Ramaswamy “will pave the way for my Administration to dismantle the Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.”
- TikTok ramped up hiring of Chinese employees even amid national security concerns. According to US Immigration Services data, TikTok and its owner ByteDance hired more than 600 Chinese staff on US H-1B visas in 2023, a 50% increase from the previous year. The new hires came as members of Congress worried the platform could be compelled to hand over US user data to the Chinese government.
- Not For Sale: new homes. America has the most new homes since 2009, but good luck trying to buy one. Both builders and buyers find themselves in a tricky position, and the demand for rentals is strong. That means a sizable chunk of America’s home supply may never be sold to prospective homeowners — and some opportunistic investors are about to win big.
What’s happening today
- President Joe Biden hosts President-elect Donald Trump at the White House.
- US Supreme Court hears Nvidia securities fraud pleading standard case.
- Bureau of Labor Statistics releases CPI data for October.
- Senate Republicans hold vote to select new majority leader.
- Cisco and other companies report earnings.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Grace Lett, editor, in Chicago. Ella Hopkins, associate editor, in London. Hallam Bullock, senior editor, in London. Amanda Yen, fellow, in New York. Milan Sehmbi, fellow, in London.
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