Virgin's Hyperloop One company has signed a deal with the government of Saudi Arabia to build a test track for its futuristic transport concept.
The hyperloop concept involves a pressurised pod with a vehicle carrying passengers or cargo up to 10 times faster than current rail.
A 35km track will be built, alongside a research and development facility and manufacturing plant, north of Jeddah.
Some remain sceptical that hyperloop travel can become a reality.
Virgin Hyperloop One said the technology could reduce a journey from Riyadh to Jeddah to 76 minutes, compared with more than 10 hours currently.
'Saudi Silicon Valley'
"Our partnership with Virgin Hyperloop One is a matter of pride for us and all of Saudi Arabia," said Mohanud A Helal, Secretary General of the Economic City Authority.
He added that he hoped it would be a "catalyst for a Saudi Silicon Valley effect".
The company showed off a pod travelling at over 100km/h (62mph) in a 500m (1,600ft) vacuum tube in Nevada in July 2017.
Meanwhile, Elon Musk has been running an annual competition at his SpaceX headquarters to test the limits of the technology.
This year's contest was won by an engineering team from the Technical University of Munich.
Afterwards, Mr Musk tweeted the 2020 event would be run in a new 10km curved vacuum tunnel.