Elon Musk is in a contentious disagreement with OpenAI’s CEO, Sam Altman, concerning the Stargate artificial intelligence initiative endorsed by President Donald Trump. This conflict is the latest development in an ongoing rivalry between the two influential tech leaders, which originated during their tenure on OpenAI’s board and continues to put Musk’s sway with the new administration to the test.
On Tuesday, Trump enthusiastically discussed the formation of a joint venture aimed at investing as much as $500 billion through a partnership involving OpenAI, known for ChatGPT, in collaboration with Oracle and SoftBank. The recently created entity, Stargate, is already in the process of establishing data centers and the necessary electricity generation to support the progressive advancement of AI technologies.
Trump characterized this initiative as “a resounding declaration of confidence in America’s potential” under his administration, initiating with a private investment of $100 billion that could ultimately expand to five times that initial amount.
However, Musk, who has been an adviser to Trump and played a significant role in funding his campaign while spearheading a government efficiency project, voiced skepticism about the financial viability of the investment just hours later. He commented on his social media platform, X, stating, “They don’t actually have the money. SoftBank has well under $10B secured. I have that on good authority.”
In response, Altman refuted Musk’s claims the following day, asserting that Musk was “wrong, as you surely know” and extended an invitation for him to visit the initial construction site in Texas that is already underway. Altman emphasized that the project is beneficial for the country and expressed hope that Musk, in his new role, would prioritize America’s interests. He included a U.S. flag emoji to underscore this sentiment.
This public dispute over Stargate is a continuation of a long-standing feud between Musk and Altman, which dates back to their differing views on who should manage OpenAI, an organization they both founded. Musk, a significant early investor and board member of OpenAI, filed a lawsuit against the company last year, alleging it had strayed from its founding principles as a nonprofit aimed at serving the public good, instead focusing on profit generation.
Since then, Musk’s grievances have evolved, leading to additional claims and requests for a court injunction to halt OpenAI’s transition towards a more profit-oriented operation. A court hearing has been scheduled for February in a federal court in California. Musk, the world’s wealthiest individual with businesses such as Tesla and SpaceX, has also launched his own AI company, xAI, which is constructing its own large data center in Memphis, Tennessee, claiming that he faces an uneven playing ground against OpenAI and its close ally, Microsoft, which underpins the considerable computational infrastructure behind tools like ChatGPT.
Reports about the Stargate initiative first emerged in March 2024, as The Information revealed details about OpenAI’s data center project, indicating that it had been in development prior to Trump’s announcement. Additionally, Crusoe Energy Systems disclosed in July that it was constructing a specially designed AI data center in Abilene, Texas, on a site managed by energy tech firm Lancium. Although they claimed the project received a multibillion-dollar investment, the backers were not identified.
AI advancements require significant energy to function, and both Crusoe and Lancium stated that the new facility would run on renewable energy, particularly from nearby solar farms, aiming to provide the most efficient green energy at the lowest cost. Crusoe confirmed it would manage and develop the site.
It remains unclear how this project was connected to the Stargate investment mentioned by Trump. Abilene’s Mayor, Weldon Hurt, noted that construction started around nine months ago, with an unexpected scale compared to initial estimates. Larry Ellison, co-founder of Oracle, remarked that the Abilene facility would be the first of approximately 10 data centers currently under construction, with the possibility of expanding to 20.
Hurt highlighted that the Abilene region is rich in various energy resources, including oil, gas, solar, and some of the globe’s largest wind farms. Nevertheless, Trump expressed opposition to wind energy just this week by pausing approvals for wind initiatives on federal land. Hurt emphasized the significance of this opportunity for Abilene, a city with around 130,000 residents, stating, “We have the capability to produce the energy for this market so it really means a lot for a town like Abilene.”
Notably absent from Trump’s conference was Microsoft, a long-time supporter of OpenAI, having invested billions and enabled the use of its data centers for developing generative AI models like ChatGPT. Microsoft, alongside chip manufacturers Nvidia and Arm, is also a technology partner in the Stargate initiative. However, it released a statement clarifying that its partnership with OpenAI would “evolve” to facilitate additional capacities for research and model training.
When asked about Musk’s remarks regarding the Stargate investment during a CNBC interview at the World Economic Forum in Davos, Switzerland, Microsoft’s CEO, Satya Nadella, shifted the focus to his company’s extensive $80 billion plan for enhancing global AI infrastructure, with $50 billion allocated for projects in the United States. He confidently asserted, “Look, all I know is, I’m good for my $80 billion,” while laughing about the situation.
