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OpenAI spars with Elon Musk over $500bn Stargate project

Tesla boss in rare break with Donald Trump over AI initiative, saying ‘they don’t actually have the money’

AI, but left the board in 2018 after clashing with the group’s chief executive Sam Altman © Christopher Furlong/Getty Images

AI, but left the board in 2018 after clashing with the group’s chief executive Sam Altman © Christopher Furlong/Getty Images

OpenAI hit back at Elon Musk’s criticism of Stargate, the new $500bn artificial intelligence infrastructure project hailed by Donald Trump as a “resounding declaration of confidence in America’s potential under a new president”.

In a rare break with Trump, Musk on Tuesday evening poured cold water on the project, writing: “They don’t actually have the money.” He added that he had it “on good authority” that SoftBank had secured less than $10bn.

OpenAI’s chief executive Sam Altman responded on Wednesday that Musk’s claim was “wrong, as you surely know”.

“I realise what is great for the country isn’t always what’s optimal for your companies, but in your new role i hope you’ll mostly put [the US] first,” he wrote on X.

While Stargate’s founding investors — SoftBank, OpenAI, Oracle and MGX, the Abu Dhabi state AI fund — will put some of their own capital to work in the company, a large portion of the initial $100bn was expected to come from new investors who had not yet been identified, said one person involved in the project.

 

 

Another person involved said the funding would be a combination of equity from the founding partners and co-investors, as well as debt, but they added: “We are prepared to deploy $100bn immediately.”

Musk, who co-chairs the newly formed Department of Government Efficiency, has been in a long-running feud with OpenAI, Altman and the start-up’s biggest backer Microsoft. Musk was a co-founder of OpenAI, but left the board in 2018 after clashing with Altman.

The Tesla chief has launched lawsuits against the two companies and Altman, claiming they have compromised their mission to create broadly beneficial AI models by instead prioritising profits.

Their dispute threatens to inject a degree of tension into Musk’s relationship with the new president, who presented the project as an early win in his plans to drive investment in the US through low taxes and deregulation.

Trump unveiled Stargate on Tuesday in the White House, flanked by Altman, SoftBank chair Masayoshi Son and Oracle co-founder Larry Ellison.

The president suggested Stargate would create 100,000 jobs and represented a victory against China, helping to keep the “future of technology” in the US. He also said he would use “emergency declarations” to expedite its access to the huge amounts of electricity it will need.

In an interview with CNBC on Wednesday, Microsoft chief executive Satya Nadella said his company had $80bn in planned capital expenditure this year, separate from Stargate. “All I know is I’m good for my $80bn.”

The group later said: “Microsoft is supportive of the Stargate project and any statements regarding our $80bn commitment to infrastructure is intended to communicate what we have committed to, and is not a reaction to anything or anyone else.”

Shares in Japan’s SoftBank jumped more than 10 per cent on Wednesday after Trump unveiled the joint venture, which plans to spend $100bn on tech infrastructure, rising to $500bn over the next four years.

Other public companies involved in Stargate also had share price rises. Oracle added 6.8 per cent, while Arm, Nvidia and Microsoft — technology partners in the project — gained 15.9 per cent, 4.4 per cent and 4.1 per cent respectively. OpenAI, which will operate the project, is not publicly traded.

SoftBank and OpenAI declined to comment. MGX and Oracle did not immediately respond to requests for comment. 

Additional reporting by Cristina Criddle

Author: George Hammond in San Francisco and Myles McCormick in Washington

Source: Financial Times

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