Musk and Altman in Dispute Over Trump-Backed Stargate AI Initiative

Elon Musk is currently engaged in a public disagreement with Sam Altman, the CEO of OpenAI, regarding the Stargate artificial intelligence project that has received backing from former President Donald Trump. This clash marks a continuation of a longstanding feud between the two well-known tech figures, which began during their time on OpenAI's board of directors and is now raising questions about Musk's influence under the new administration.

On Tuesday, Trump announced plans for a joint venture aimed at investing up to $500 billion. This initiative involves OpenAI, known for creating ChatGPT, alongside partners Oracle and SoftBank.

The Stargate project is in the early stages of establishing data centers and generating the electricity necessary for advancing rapidly evolving AI technologies.

Trump characterized this investment as a significant vote of confidence in America's potential, noting an initial commitment of $100 billion that could potentially grow fivefold.

However, hours following the announcement, Musk, who acts as a close adviser to Trump and is also leading a government cost-cutting initiative, raised doubts about the feasibility of the investment. Musk took to his social media platform, X, to assert, "They don’t actually have the money. SoftBank has well under $10B secured. I have that on good authority."

In response, Altman addressed Musk's claims the next day, stating Musk was "wrong, as you surely know" and encouraged him to visit the project site in Texas, which is already under construction.

Altman said, "This is great for the country. I realize 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 United States first," emphasizing a sense of national pride with a U.S. flag emoji.

The Background of Their Disagreement

This public dispute over Stargate is indicative of a deeper, ongoing conflict between Musk and Altman, which initially arose from disagreements over leadership roles within OpenAI, an organization both men were instrumental in founding. Musk, who was an early funder and board member of OpenAI, has taken legal action against the organization, claiming it has strayed from its original goal as a nonprofit research lab aimed at benefiting the public good, now prioritizing profits.

Musk has intensified this legal battle, making new allegations and seeking a court ruling to halt OpenAI’s transition into a more profit-oriented entity. A court hearing is scheduled for February in a federal court in California.

Concurrently, Musk has established his own competing AI firm, xAI, which is working on its big data center in Memphis, Tennessee. He argues that xAI is at a disadvantage due to what he perceives as unfair competition from OpenAI and its partner Microsoft, which has provided essential computing resources for creating AI technologies like ChatGPT.

Details About Stargate

The Stargate initiative was first reported by Tech news outlet The Information in March 2024, indicating that plans were underway well before Trump's announcement.

In July, Crusoe Energy Systems revealed its own ambitious project to construct a large AI data center near Abilene, Texas, in collaboration with energy technology company Lancium. The partners stated the project was backed by a multibillion-dollar investment, though they did not disclose who the financial backers were.

AI development relies heavily on electricity, and both companies involved in the Texas site pledged to use renewable energy sources, such as solar farms, promoting a sustainable approach described by Lancium’s CEO, Michael McNamara.

It remains unclear how the Crusoe Energy and Lancium project transitioned into the first phase of the Stargate investment mentioned by Trump. Abilene’s Mayor, Weldon Hurt, mentioned that construction on the project started about nine months ago; he noted a bigger scale than initially expected.

According to Oracle co-founder Larry Ellison, the Abilene center is the first of an anticipated 10 data centers being built, with plans possibly extending to 20 locations.

Mayor Hurt highlighted that the energy-rich region surrounding Abilene not only provides oil and gas but also boasts some of the largest wind farms globally. However, Trump has recently put a temporary hold on the approval of new wind projects on federal lands.

Microsoft's Position

Interestingly, Microsoft has been absent from the press conference held by Trump. The tech giant has been a long-time supporter of OpenAI, investing billions into the organization and enabling its data centers to facilitate AI model development.

This week, Microsoft confirmed it is investing in the Stargate project but stated that its partnership with OpenAI would change, allowing OpenAI to expand its capacity mainly for research and model training.

When asked about Musk's comments regarding the Stargate initiative during a CNBC interview at the World Economic Forum in Davos, Switzerland, Microsoft CEO Satya Nadella shifted focus to his company’s $80 billion plan for expanding its global AI infrastructure, with $50 billion earmarked for the U.S.

Nadella humorously added, "Look, all I know is, I’m good for my $80 billion," indicating confidence in Microsoft's investment strategy.Musk, Altman, Trump