The future of LIV Golf is in doubt, with Saudi Arabia’s Public Investment Fund preparing to cut funding for the $5bn rebel tour.

LIV executives were late arriving at the tour event in Mexico City this week after being called up to a meeting in New York, with uncertainty over the immediate future first emerging at the Masters in Augusta last weekend. Rumours that LIV could even be shut down had begun to circulate on social media on Tuesday evening, with officials from the tour declining to respond.

The sixth event of LIV’s fifth season City will go ahead as planned on Thursday in Mexico, but it has been overshadowed by widespread reports that PIF plans to withdraw the tour’s funding. LIV has been under pressure for some time due to its inability to agree a merger with the PGA Tour three years after signing a so-called “framework agreement,” with that standoff compounded by PIF’s desire to cut costs.

PIF released details of a new five-year economic strategy this week with the emphasis on sustainable investment that will deliver financial and infrastructure returns domestically, a model at odds with the free-spending, disruptive internationalism epitomised by LIV Golf. Significantly there was no mention of sport among the seven key investment areas mentioned in a document issued by PIF’s board of directors and signed by Saudi Arabia’s crown prince, Mohammed bin Salman.

PIF has spent over $5bn on LIV since its 2021 launch, but prize money and bonus payments have been reduced significantly this year. While some of the biggest names in golf including Phil Mickelson, Dustin Johnson, Jon Rahm, Sergio García and Bryson DeChambeau left the PGA and DP World tours for LIV, Brooks Koepka and Patrick Reed returned to the PGA Tour this year, while DeChambeau has refused to sign a new deal.

A source who has worked with the Saudi Ministry of Sports on several projects told the Guardian that as well as domestic projects such as the 2034 World Cup, PIF is focusing its sports budget on football and esport, with golf no longer a priority. In another indication of its direction of travel, PIF is ending its relationship with the Women’s Tennis Association, and its three-year deal to host the WTA finals in Riyadh will not be extended after it expires in November.

The LIV rumours began on Tuesday evening with a post on X from the golf account Monday Q Info, run by the respected journalist Ryan French, in which he claimed that multiple sources had informed him that “a bombshell announcement on LIV’s future is imminent”. French went further when speaking on X Spaces later that night, claiming he had heard that LIV is “shutting down”.

LIV players and officials appear to be in the dark, with García telling the media in Mexico that they have not received an update. “Frankly, we haven’t heard anything other than what Yasir [al-Rumayyan] already told us at the beginning of the year,” García said. “That is, he’s behind us, that they have a project of many years. There are always many rumours. I can’t comment on anything more than what we know.”

No pre-tournament press conferences took place on Tuesday with LIV suffering technical difficulties owing to an alleged power failure at the venue. However, it appeared to be business as usual for the players on Wednesday with the pro-am tournament teeing off as scheduled at 8.30am local time.