Elon Musk, one of President Donald Trump’s most influential advisors, has openly questioned the feasibility of the $500 billion Stargate AI initiative, calling into doubt the financial readiness of its participants.
The project, announced during a White House event, aims to develop large-scale artificial intelligence infrastructure across the United States, with an initial $100 billion investment focused on building data centers in Texas.
Musk took to his social media platform, X, to assert that SoftBank, one of the project’s key partners, has “well under $10 billion secured. I have that on good authority.”
SoftBank has well under $10B secured. I have that on good authority.
— Elon Musk (@elonmusk) January 22, 2025
Trump defended the initiative, dismissing Musk’s remarks as stemming from personal conflicts. He sought to downplay Musk’s critique, attributing it to personal grievances rather than substantive concerns. Addressing reporters, Trump said, “The people in the deal are very, very smart people, but Elon, one of the people he happens to hate. But I have certain hatreds of people too.”
Trump underscored the project’s reliance on private funding, adding, “They’re putting up the money. The government’s not putting up anything.” Trump said Musk’s commentary was just a case of bad blood, because he “hates one of the people in the deal”.
The Stargate project represents a pivotal component of Trump’s broader strategy to solidify America’s leadership in artificial intelligence, creating jobs and strengthening national security. However, Musk’s critique has sparked a public dispute that highlights growing divisions within the tech sector and Trump’s advisory circle.
Musk and Altman’s Feud Intensifies
The tensions surrounding Stargate mirror a long-standing rivalry between Musk and Altman, whose leadership of OpenAI has been a frequent target of Musk’s criticism.
Musk co-founded OpenAI in 2015 but later parted ways, citing disagreements over its direction and its shift from a nonprofit to a for-profit model. Musk has accused Altman and OpenAI of prioritizing corporate interests, alleging they abandoned their original mission of developing AI for public benefit. In an ongoing lawsuit, Musk is trying to block OpenAI’s for-profit transition.
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Altman responded to Musk’s skepticism about Stargate’s funding with an invitation to visit one of the project’s initial sites, writing on X: “Wrong, as you surely know. Want to come visit the first site already under way?” He further added, “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 [America] first.”
wrong, as you surely know.
— Sam Altman (@sama) January 22, 2025
want to come visit the first site already under way?
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 🇺🇸 first.
Musk retaliated with a barrage of posts mocking OpenAI’s financial projections, sharing a meme suggesting that the project’s $500 billion valuation lacked credibility.
He also criticized Altman’s leadership, referring to him as a “liar” and sharing a Reuters headline highlighting Altman’s financial ties to OpenAI after its transition to a for-profit entity.
Altman literally testified to Congress that he wouldn’t get OpenAI compensation and now he wants $10 billion! What a liar. https://t.co/YpHvcm0WZa
— Elon Musk (@elonmusk) January 23, 2025
Musk’s criticism extended to Altman’s past comments about Trump, including a post from 2016 in which Altman expressed intentions to counter Trump’s influence.
Trump Defends Stargate’s Vision and Private Investment Model
Despite Musk’s public dissent, Trump has remained committed to the Stargate initiative, positioning it as a cornerstone of his administration’s efforts to strengthen the U.S. economy and secure technological leadership.
Trump described the initiative as transformative for job creation and national security. SoftBank CEO Masayoshi Son echoed this sentiment during the project’s launch, calling Stargate “a strategic capability to protect the national security of America and its allies.”
The Stargate project is expected to rely entirely on private investments from OpenAI, SoftBank, and Oracle, with plans to expand data center infrastructure across the country. While the project’s initial phase is focused on Texas, its long-term goals include scaling AI capabilities nationwide to support large-scale model training and deployment.
Microsoft and OpenAI: Evolving Dynamics Amid Stargate’s Launch
The Stargate initiative also marks a turning point in OpenAI’s partnership with Microsoft, which has been its primary infrastructure provider since 2019.
Microsoft has invested nearly $14 billion in OpenAI and retains exclusive access to its APIs and intellectual property through Azure, its cloud computing platform. However, Stargate’s funding model signals OpenAI’s growing independence, with partnerships involving SoftBank and Oracle providing additional computational resources.
Microsoft CEO Satya Nadella recently addressed these developments in an interview, emphasizing the company’s continued collaboration with OpenAI. “OpenAI APIs are exclusive to Azure going forward. Nothing changes there,” Nadella stated.
He also highlighted Microsoft’s $80 billion investment in Azure, describing it as a commitment to supporting the scalability of AI applications.
Stargate’s funding approach reflects OpenAI’s response to the increasing costs of AI development, driven by the principles of scaling laws. These laws dictate that larger AI models require exponentially greater computational resources, making cost-effective infrastructure a necessity.
The project’s $500 billion budget is intended to address these challenges, though Musk’s concerns about funding viability cast uncertainty on its implementation.
Political and Economic Implications of Stargate
Stargate’s alignment with Trump’s national AI strategy underscores its broader political and economic significance.
The initiative aims to create hundreds of thousands of jobs while positioning the U.S. as a global leader in artificial intelligence. However, the public feud between Musk and Altman has raised questions about the administration’s ability to manage competing interests within its advisory ranks.
The project also highlights the intensifying competition within the AI sector, with companies like Google, Anthropic, and Musk’s xAI advancing their capabilities. OpenAI’s push for infrastructure independence reflects its desire to remain competitive while addressing rising computational costs.
While Trump has framed Stargate as a critical investment in America’s future, the controversy surrounding its funding and the public clash between Musk and Altman underscore the challenges of coordinating such costly and large-scale initiatives.