Musk clashes with OpenAI CEO Sam Altman over Trump-backed Stargate AI project

On January 24, 2025By Littum

Elon Musk clashes with OpenAI CEO Sam Altman over the Stargate artificial intelligence infrastructure project touted by President Donald Trump, the latest in a feud between the two tech billionaires who started on OpenAI’s board and are now testing Musk’s influence with the new president.

On Tuesday, Trump had talked about a joint venture investing up to $500 billion through a new partnership formed by OpenAI, the maker of ChatGPT, along with Oracle and SoftBank.

The new entity, Stargate, is already starting to build data centers and need for electricity production for further development of rapidly developing AI technology.

Trump declared it “a resounding statement of confidence in America’s potential” under his new administration, with an initial private investment of $100 billion that could reach five times that amount.

But Musk, a close Trump adviser who helped launch his campaign and now heads a government cost-cutting initiative, questioned the value of the investment hours later.

“They don’t actually have the money,” Musk wrote on his social platform X. “SoftBank has secured well under $10 billion. I have that on good authority.”

Altman responded Wednesday to say Musk was “wrong, as I’m sure you know” and invited Musk to visit the first site in Texas, which is already under construction.

“(It) is great for the country. I realize what’s good for the country isn’t always what’s best for your businesses, but in your new role, I hope you’ll mostly put (America) first,” Altman wrote, using an American flag emoji to represent America.

Steve Bannon urges Musk to cast doubt on Trump-backed AI project

Behind the feud

The public clash over Stargate is part of a years-long dispute between Musk and Altman that began with a boardroom rivalry over who would run OpenAI, which both men helped found.

Musk, an early OpenAI investor and board member, sued the AI firm last year alleging that it had betrayed its fundamental goals as a nonprofit research laboratory for the benefit of the public rather than the pursuit of profit.

Elon Musk arrives before the 60th presidential inauguration in the rotunda of the U.S. Capitol in Washington, Monday, Jan. 20, 2025. (Kevin Lamarque/Pool Photo via AP)

Musk has since escalated the dispute, adding new demands and asking for a court order that would stop it OpenAI’s plans to transform itself into a for-profit company more fully. A hearing is set for February in federal court in California.

The world’s richest man, whose companies include Tesla, SpaceX and X, last year started his own rival AI company, xAI, which is building its own large data center in Memphis, Tennessee. Musk says it faces unfair competition from OpenAI and its close business partner Microsoft, which has provided the vast computing resources needed to build AI systems such as ChatGPT.

When did Stargate start?

Tech news outlet The Information first reported on an OpenAI data center project called Stargate in March 2024, indicating that it has been in the works long before Trump announced it.

Another company — Crusoe Energy Systems — announced in July that it was building a large and “purpose-designed AI data center” on the northwest edge of Abilene, Texas at a site operated by energy technology company Lancium. Crusoe and Lancium said in a joint statement at the time that the project was “backed by a multibillion-dollar investment,” but did not reveal its backers.

AI technology requires huge amounts of electricity to build and operate, and both companies said the project would be powered by renewable sources such as nearby solar farms, in a way that Lancium CEO Michael McNamara said would “deliver the maximum amount of green energy at the lowest possible costs.” Crusoe said it would own and develop the facility.

It is not clear how and when this project became the first phase of the Stargate investment revealed by Trump. Abilene Mayor Weldon Hurt said construction began about nine months ago, but “we didn’t know it was going to be this big. We thought it was going to be about a third of this size.”

Oracle co-founder Larry Ellison said Tuesday that the Abilene project is the first of about 10 data center buildings currently under construction, and that number could expand to 20.

Hurt told The Associated Press that the region around Abilene, a city of about 130,000 people, benefits from a wealth of energy sources, including oil, gas, solar and some of the “largest wind farms in the world,” even as Trump signaled opposition to wind power in this week off temporary shutdown approval of wind projects on federal lands.

“We have the ability to produce the energy for this market, so that really means a lot to a city like Abilene,” Hurt said. “To have this opportunity here in West Central Texas, to have something like this to make Abilene significant, we’re just excited about it.”

Where is Microsoft?

Absent from Trump’s press conference Tuesday was Microsoft, which has long backed OpenAI with billions of dollars in investment and enables its data centers to be used to build the models behind ChatGPT and other generative AI tools.

Microsoft is also a technology partner in the Stargate project, along with chipmakers Nvidia and Arm, but issued a statement noting that its OpenAI partnership will “evolve” in a way that allows OpenAI to “build additional capabilities, primarily for research and training of models.”

Asked about Musk’s comments on the Stargate deal Wednesday during a CNBC interview at the World Economic Forum in Davos, Switzerland, Microsoft CEO Satya Nadella turned to his company’s own $80 billion plan to build its global AI infrastructure, $50 billion of which will be used in the United States

“Look, all I know is that I’m good for my $80 billion,” Nadella said, laughing.