Elon Musk tried to pull rank to torpedo Sam Altman’s AI data center deal: WSJ

According to a Wall Street Journal report, Elon Musk used Trump’s name as leverage in an attempt to stop OpenAI’s CEO, Sam Altman, from finalizing a deal to open an AI data center in Abu Dhabi.

The Trump administration has backed OpenAI’s CEO, Sam Altman, despite the latter’s public altercations with U.S. “first buddy,” Elon Musk.

Now, WSJ has reported that Elon Musk tried to sabotage OpenAI’s deal with a group of major U.S. tech companies to build one of the world’s largest AI data centers in Abu Dhabi.

The project named Stargate UAE is being developed in partnership with G42, an AI firm backed by the United Arab Emirates’ national security adviser, Sheikh Tahnoon bin Zayed al Nahyan.

Elon Musk’s attempt at sabotage

WSJ cited individuals familiar with the matter in its report, claiming that Musk warned G42 executives during a call that their data center deal wouldn’t receive approval from President Donald Trump unless his own AI startup, xAI, was included.

The call took place shortly before Trump’s visit to the Gulf region in the middle of May. Musk joined Trump on that trip after he learned that OpenAI’s CEO, Sam Altman, would also be in attendance to finalize the agreement.

It is reported that Musk was furious when he discovered that Altman would be the lead in what could be the largest foreign AI investment by a U.S. company. It was a similar frustration with Altman’s potential success that led Musk to publicly criticize the Stargate U.S. project on his social media platform X in January,  claiming that its backers lacked adequate funding.

White House officials have confirmed that Musk’s objections led to a temporary review of the deal. “Musk didn’t want a deal that seemed to benefit Altman,” one official said.

However, a senior official defended Musk, stating that he had only raised his concerns about “fairness for all AI companies.”

Musk co-founded OpenAI with Altman in 2015, but he left the company in 2018 after a power struggle and has since sued Altman, stating that he is “not trustworthy” and referring to him publicly as “Scam Altman.”

Despite Musk’s complaints, the Trump administration chose to move forward with the deal and it was officially announced on May 22.

The White House Press Secretary, Karoline Leavitt, hailed the deal as “another great deal for the American people, thanks to President Trump and his exceptional team.”

The rush for Stargate UAE

The Stargate UAE project plays a critical role in the UAE’s AI expansion strategy. The initial phase of the data center, with a capacity of 200 megawatts, is expected to be completed by the end of 2026, and the plan is to eventually scale that figure up to 1 gigawatt, which would place it among the most powerful AI facilities in the world.

The Abu Dhabi project is the first major international build for OpenAI and will be led by G42 and supported by OpenAI, Oracle, Nvidia, Cisco, and SoftBank.

The companies involved have agreed to a reciprocal arrangement in which G42 would match its investment in the UAE data center with a similar investment in the Stargate U.S. project.

OpenAI also confirmed that an enhanced version of its flagship product, ChatGPT, would be offered for free to users across the UAE.

The data center agreement is the result of months of behind-the-scenes negotiations, including a critical reversal of Biden-era restrictions on advanced chip exports to the Gulf.

The Trump administration ultimately permitted a deal that would allow the UAE to import up to 500,000 AI chips annually. To close that deal, the UAE pledged over $1.4T in U.S. investments, hosted top American CEOs in Abu Dhabi, and even invested $2B in Trump-affiliated cryptocurrency to grease the wheels with U.S. officials and advisors.

Despite Musk’s vocal opposition and his push for xAI to be included, G42 chose OpenAI as the lead partner. However, Musk’s companies could be involved in several future Gulf collaborations.

G42’s MGX fund was a key investor in xAI’s $6B fundraising round in December, and xAI is on a shortlist of U.S. firms conditionally approved to receive a large share of the newly authorized AI chips.

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