Microsoft and OpenAI spar with Elon Musk over $500bn Stargate project

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

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

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

“I realize that what is best for the country is not always optimal for your companies, but in your new role, I hope you will primarily put: [the US] first,” he wrote.

While Stargate’s founding investors, SoftBank, OpenAI, Oracle, and MGX, Abu Dhabi’s state fund for artificial intelligence, will invest some of their own capital to work in the company, the initial 100 are expected to Most of the billion dollars will come from new investors who have not yet been identified, according to 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 ready to deploy $100 billion immediately.”

Musk, co-chairman of the newly created Department of Government Efficiency, has been at loggerheads with OpenAI, Altman and the startup’s biggest backer, Microsoft, who co-founded OpenAI but left the board in 2018 after clashing with Altman.

The Tesla boss has filed a series of lawsuits against the two companies and Altman, alleging they violated their mission to create broadly profitable AI models by prioritizing profits instead.

Their dispute now threatens to put some strain on Musk’s relationship with the new president, who has touted the project as an early victory in his plans to boost US investment through lower taxes and deregulation.

Trump opened Stargate at the White House on Tuesday, flanked by Altman, SoftBank Chairman Masayoshi Son and Oracle co-founder Larry Ellison.

The president suggested Stargate would create 100,000 jobs and represent a victory against China, helping to preserve the “future of technology” in the U.S. He also said he would use “emergency declarations” to speed up his access to the vast amounts of electricity he will need.

In an interview with CNBC on Wednesday, Microsoft CEO Satya Nadella said his company has planned $80 billion in capital spending this year, separate from Stargate. “All I know is that I’m good for my $80 billion.” he said.

Shares in Japan’s SoftBank rose more than 10 percent on Wednesday after Trump unveiled a joint venture that plans to spend $100 billion on technology infrastructure, up to $500 billion over the next four years.

Other public companies involved in Stargate also saw their stock prices rise. Oracle added 7 percent, while Arm, Nvidia and Microsoft, the project’s technology partners, gained 17 percent, 4 percent and 3 percent, 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.