A high-stakes clash has erupted between Elon Musk and OpenAI CEO Sam Altman over the “Stargate” artificial intelligence (AI) infrastructure project, a $500 billion initiative championed by President Donald Trump, Al Jazeera reports.
The dispute, a continuation of a long-simmering feud between the two tech titans, is now testing Musk’s influence within the new administration.
President Trump unveiled the Stargate project on Tuesday, touting a joint venture between OpenAI, the creator of Chat, alongside Oracle and SoftBank. This new partnership aims to build data centers and power generation facilities to support the rapid development of AI technology, with initial private investments totaling $100 billion, potentially reaching $500 billion. Trump hailed it as “a resounding declaration of confidence in America’s potential.”
However, Musk, a close advisor to President Trump who also spearheaded his campaign’s fundraising efforts and now leads a government cost-cutting initiative, quickly cast doubt on the viability of the project.
“They don’t actually have the money,” Musk wrote on his social media platform X, alleging SoftBank’s secured funds are “well under $10B.”
Altman responded on Wednesday, dismissing Musk’s claims as “wrong, as you surely know” and inviting Musk to visit the first Stargate site, currently under construction in Texas.
The public spat over Stargate is the latest chapter in a multi-year conflict between Musk and Altman that stems from a power struggle over the leadership of OpenAI, which both men helped establish. Musk, an early investor and board member, sued OpenAI last year, accusing it of betraying its founding mission as a non-profit research organization for the public good in favor of pursuing profit. Musk has since escalated the legal battle, seeking a court order to halt OpenAI’s conversion into a more profit-driven business. A hearing is scheduled for early February in a California federal court.
Musk, the world’s richest man and CEO of Tesla, SpaceX, and X, has since launched his own competing AI company, xAI, and is also constructing a large data center in Memphis, Tennessee. He claims he is facing unfair competition from OpenAI and its close partner Microsoft.
Stargate: Years in the Making?
While President Trump presented Stargate as a new initiative, tech news outlet The Information reported on an OpenAI data center project dubbed “Stargate” as early as March 2024, indicating that the project was in development prior to Trump’s announcement.
Additionally, Crusoe Energy Systems announced in July it was building a large “specially designed AI data center” near Abilene, Texas, at a site managed by energy technology firm Lancium. This project, supported by a “multibillion-dollar investment,” was not initially linked to OpenAI but it is now believed to be the first phase of the Stargate initiative. Crusoe and Lancium stated that the data center would be powered by renewable energy sources such as nearby solar farms.
Oracle co-founder Larry Ellison revealed on Tuesday that the Abilene project is the first of roughly ten data centers currently under construction, with the potential for expansion up to twenty sites.
Microsoft’s Shifting Role
Notably absent from President Trump’s press conference on Tuesday was Microsoft, a long-time supporter of OpenAI. While Microsoft has confirmed its participation in the Stargate project, a statement indicated its OpenAI partnership will “evolve” to allow OpenAI “to build additional capacity, primarily for research and training of models.”
During a CNBC interview at the World Economic Forum in Davos, Switzerland, Microsoft CEO Satya Nadella addressed Musk’s comments about the Stargate deal by highlighting his own company’s $80 billion global AI infrastructure plan, with $50 billion being invested within the US.
