This proof-of-concept design was undertaken by a group of nine mechanical design students from Yale. As a project for class, they set out to prove that a spokeless wheel was possible--and they did just that. The design doesn't look that practical for real-world application, but it certainly looks cool. The designers envision using the empty space to house a motor or basket. The bike is a single-speed configuration and looks to house internal gearing inside the rim.
Theoretically, one of the main advantages of cutting out the spokes (or any other bike component) would be to save weight. However, this burly wheel and the hardware that's needed to attach it to the frame looks like it adds significant weight rather than cutting it. It's still a pretty cool design, though.