Topline
It took less than two days for Elon Musk to voice displeasure with President Donald Trump, as the world’s richest man Musk questioned perhaps Trump’s biggest business announcement yet, a $500 billion deal bolstering Musk’s artificial intelligence company.
Trump, left, and Musk in November.
Key Facts
Musk took to his X social media platform to poke holes in the “Stargate” AI infrastructure deal Trump announced at the White House on Tuesday, a private joint venture funded by American technology giants OpenAI and Oracle, Japan-based SoftBank and Emirati-based MGX investment firms.
The project was described by Trump as a “monumental undertaking and a “resounding declaration of confidence in America’s potential under a new president” and received $100 billion in initial funding with a total of $500 billion in investments planned over the next four years, Trump said Tuesday press conference, while flanked by billionaires Sam Altman OpenAI CEO, Oracle chairman Larry Ellison and SoftBank CEO Masayoshi Son.
But Musk later claimed on X “they don’t actually have the money,” in a reply to OpenAI’s press release on the project, adding he has it on “good authority” that “SoftBank has well under $10B secured.”
A person familiar with Stargate’s funding refuted Musk’s claim, noting to Forbes the project has the $100 billion ready to go via equity from its founding four partners and other co-investors, as well as outside sources including debt fundraising.
Altman slapped back at Musk Wednesday, saying on X Musk’s funding claim is “wrong, as you surely know” and “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 🇺🇸 first,” referring to Musk’s advising of Trump, nominally as the head of the “Department of Government Efficiency” commission.
Musk escalated his criticism Wednesday afternoon, dubbing Stargate “fake” and calling Altman a “swindler.”
Tangent
To Altman’s point, Musk’s sharp criticism of Trump’s major announcement was highly unusual for someone so close to the president – MSNBC contributor Sam Stein described a “SENIOR official in the White House publicly declaring that the president’s big announcement from the day prior is kind of a ruse” as “definitely a first” of its kind reaction in Stein’s memory.
Crucial Quote
Stargate was a major win for OpenAI as it competes with xAI and other big tech names in its pursuit of artificial general intelligence (AGI), says UBS analyst Karl Keirstead in a Wednesday note to clients: “OpenAI is in a race against Elon Musk-backed xAI, Google, Meta and Anthropic (funded by Amazon) among others” and “this puts OpenAI in a better position long-term to win the model war,” wrote Keirstead.
Key Background
Musk’s pushback to Stargate likely traces back to his bitter feud with Altman and the ChatGPT generative AI powerhouse OpenAI, which Musk cofounded as a non-profit in 2015 before leaving in 2018, eventually launching a direct competitor to OpenAI in his xAI startup and suing OpenAI last year over a dispute regarding the company’s shift toward profit-taking. The billionaire AI leaders have resorted to public name calling in their feud, with Musk denouncing Altman as “someone who is not trustworthy” in an October interview with Tucker Carlson and Altman accusing Musk of being “clearly a bully in a December interview with the Free Press. Musk’s xAI was most recently valued at $50 billion in a private funding round, about a third of OpenAI’s more than $150 billion valuation.
Surprising Fact
Musk’s Stargate criticism comes despite the involvement of his close ally, mentor and former Tesla board member Ellison. “Larry Ellison is awesome,” Musk gushed in November, replying to a video in which Ellison described Musk as his “friend.”
Stargate Linked Stocks Surge
Shares of companies involved in the AI project rallied Wednesday. SoftBank stock rose 11% in Tokyo trading, while Oracle gained 7% and Stargate technology partners Nvidia and Arm Holdings (majority owned by SoftBank) jumped 5% and 15%, respectively, by mid afternoon.
Forbes Valuations
The Stargate feud involves some of the wealthiest people on the planet. Musk is the richest person ($430 billion net worth), Ellison the third-richest ($231 billion), Son the 52nd-richest ($34 billion), Trump the 540th-richest ($6 billion) and Altman the 2,548th-richest ($1.1 billion).
Further Reading
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