Elon Musk reportedly sought to block OpenAI’s Abu Dhabi AI deal unless xAI was included, according to The Wall Street Journal. This alleged pressure occurred during President Trump’s mid-May Gulf tour, with the “Stargate U.A.E.” project advancing despite it, highlighting AI rivalries and Musk’s political influence.
This power play underscores the high-stakes global race for AI dominance and the strategic ambitions of nations like the United Arab Emirates. Musk, who co-founded OpenAI but departed in 2018 amidst a reported power struggle, has since become a vocal critic of CEO Sam Altman and is fighting a legal battle against OpenAI. His intervention reportedly included warnings that President Trump would not approve the deal without xAI’s participation.
Nevertheless, the White House ultimately endorsed the project. OpenAI officially announced the Stargate U.A.E. deal on May 22. OpenAI statement the agreement “was developed in close coordination with the US government, and we greatly appreciate President Trump for his support in making it possible.” The Wall Street Journal noted the deal was announced a week later than initially hoped, with some details still pending completion.
Musk’s Influence And White House Maneuvers
The Wall Street Journal reported that Musk, who spent approximately $300 million to re-elect Trump and became a close adviser, learned of Altman’s involvement and the pending UAE deal just before the presidential tour.
He reacted angrily and subsequently joined the trip. During a call with officials at G42, an Emirati AI firm central to the project, Musk allegedly cautioned that President Trump would not sign off unless xAI was included.
Following Musk’s complaints, President Trump and U.S. officials reviewed the deal terms before deciding to move forward. White House press secretary Karoline Leavitt stated, “This was another great deal for the American people, thanks to President Trump and his exceptional team.” A senior White House official added that Musk “relayed his concerns about fairness for all AI companies.”
The Contentious OpenAI-UAE Deal
The UAE, particularly through Sheikh Tahnoon bin Zayed al Nahyan, the nation’s national security adviser, has aggressively pursued AI capabilities. These efforts included lobbying the Trump administration for access to AI chips and by bolstering a Trump-family business as part of its strategy to secure a change in chip export rules.
Sheikh Tahnoon had previously invested in several major U.S. AI startups, including some of Musk’s ventures, before G42 focused on OpenAI for the inaugural data center in the planned five-gigawatt Abu Dhabi cluster.
The Stargate U.A.E. initiative, a collaboration with Oracle, Nvidia, Cisco, and SoftBank, requires G42 to fund construction in Abu Dhabi and a similar-sized project in the U.S..
This development follows Musk’s earlier public criticism of the Stargate U.S. project in January 2025, where he claimed its backers lacked adequate funding. Released emails reveal Musk wanted to take over OpenAI, which the company’s board rejected, leading to Musk’s 2018 departure. In February this year, Elon Musk made a takeover offer to acquire OpenAI for $97.4 billion, which the board rejected, dismissing it as “not a bid at all.”
Shifting Policies And Broader Concerns
The backdrop to these events includes changes to U.S. technology export policies. David Sacks, a White House advisor for AI and crypto, confirmed in Riyadh on May 13, that the Trump administration was rescinding the “Biden diffusion rule.”
Sacks explained this rule had overly restricted the global proliferation of American technology. A U.S. Commerce Department spokesperson characterized the old rule as “overly complex, overly bureaucratic, and would stymie American innovation.”
The policy adjustment is anticipated to provide Gulf nations with greater access to advanced AI chips. The U.S. and UAE were reportedly finalizing a deal for the UAE to import up to 500,000 advanced Nvidia AI chips annually, starting in 2025. U.S.
Commerce Secretary Howard Lutnick endorsed this, explaining the agreement extends the American tech stack to a key regional partner, marking a milestone for U.S. AI dominance, and includes “strong security guarantees to prevent diversion of U.S. technology.” President Trump himself called the UAE AI chips deal “a very big contract”.
However, critics harbor concerns that such deals could pose national security threats and risk turning the Middle East into a significant AI business rival to the U.S. Meanwhile, under the U.S.-U.A.E. framework, Musk’s xAI is reportedly on a shortlist of U.S. companies conditionally approved to buy most of the 500,000 chips permitted annually and is considered a likely candidate for future sites at the Abu Dhabi data-center cluster, according to The Wall Street Journal.
Regional AI Ambitions
The UAE’s Stargate project is part of a larger trend of significant AI investment in the Middle East. Saudi Arabia, for instance, has launched Humain, a state-owned AI entity backed by its Public Investment Fund, with plans for a $10 billion venture fund and $23 billion in deals with U.S. tech leaders.
Humain’s CEO, Tareq Amin, emphasized the urgency, stating, “The world is hungry for capacity. There are two paths you could take: you take it slow and we are definitely not taking it slow, or you go fast.”
Nvidia CEO Jensen Huang has remarked that “AI, like electricity and internet, is essential infrastructure for every nation.” These regional ambitions are reshaping the global tech landscape, with massive capital deployment aimed at securing a leading role in the AI revolution, often in partnership with U.S. technology providers.
