Tesla head Elon Musk reportedly tried to sabotage OpenAI’s massive artificial intelligence infrastructure deal in the Middle East, requiring his own AI company xAI to be included in the project. But his bluffing didn’t pay off, a recent Wall Street Journal report stated.
The row is over OpenAI’s role in Project Stargate, a historic $500 billion AI investment project that was made public earlier this year. The deal is for OpenAI to partner with some of the largest US tech firms and G42, an Emirati artificial intelligence firm, to build what will be one of the largest AI computing hubs in the world in Abu Dhabi.
Musk’s Backstage Pressure Campaign
The report says Musk was especially irked that OpenAI CEO Sam Altman was also in the official delegation that accompanied President Donald Trump on a recent trip to the Gulf, where the UAE deal was finalized. This somehow did not sit well with the billionaire businessperson, who decided to go solo.
Musk was reported to have directly called G42 officials such as Sheikh Tahnoon bin Zayed, the UAE’s national security adviser and brother of the president. In the calls, he insisted that his AI company xAI, be part of the ambitious project.
The Tesla CEO went further. He reportedly threatened that the Trump administration would not give the deal approval unless his company was brought in as a partner. This was in effect, an effort to leverage his supposed clout with the administration to muscle his way into the profitable deal.
The Agreement That Sparked the Scandal
The OpenAI acquisition comes under the umbrella of Stargate UAE, which in turn comes under the umbrella of the overall Project Stargate. The ambitious venture involves constructing a huge data center complex in Abu Dhabi that will be a giant AI computing facility. The venture is being funded by tech giants such as Oracle, Nvidia, SoftBank, and Cisco, and is one of the largest AI infrastructure investments made so far.
The size of the project is substantial, with the $500 billion investment being a tremendous undertaking to build AI capability in the Middle East. For any artificial intelligence company, being part of such a project would be a tremendous business prospect and strategic asset.
White House Support Amid Pressure
Even after being threatened and pressured by Musk, White House officials did take the deal into consideration and went ahead and approved it without involving xAI. This essentially called Musk’s bluff and showed that his threats to ensure the deal was not completed did not have the same weight he believed they would.
An American government official framed Musk’s grievances in the context of achieving “fairness for all AI companies,” but individuals close to the issue said this was actually about his long-standing personal and professional rivalry with Sam Altman.
The Musk-Altman Rivalry
The bad blood between Altman and Musk is not new. Both of them co-founded OpenAI together in 2015, but Musk left the organization in 2018. Their relationship has been tense ever since.
Musk has also continuously accused Altman of dismantling the original founding ethos of OpenAI. He is particularly harsh on the company’s shift toward profit-driven development and from open-source models. This has become so heated that Musk has sued OpenAI for such directional changes.
The failed attempt to insert xAI into the Middle East deal appears to be the latest chapter in this ongoing rivalry. It suggests Musk’s indignation at OpenAI’s success has reached the point where he’ll stop at potentially questionable lengths in a bid to level the score.
What This Means Moving Forward
This event is in reference to the fierce competition in the AI arena and to what extent some executives and companies will go just to position themselves in this fast-emerging industry. Although Musk’s campaign of pressure did not succeed, it is in reference to the extent to which the stakes have been escalated in the competition to control artificial intelligence infrastructure and development.
The success of the UAE deal without xAI involvement also shows that OpenAI has good relations with the government as well as with the international community, even when it’s being hounded from outside by competitors as well as former allies alike.
