Elon Musk has publicly criticized Donald Trump’s AI initiative, Stargate, questioning its funding and labeling it as ‘fake.’ Their once-close relationship has soured, with Musk targeting both Trump and OpenAI’s CEO, Sam Altman. Despite Trump’s commitment of $500 billion to Stargate, uncertainties about funding persist. Analysts suggest Musk’s opposition may stem from personal grievances and competitive rivalry, as Stargate bolsters OpenAI’s position in the AI landscape, overshadowing Musk’s own ventures.
Elon Musk’s Critique of Trump’s AI Initiative: A Battle of Giants
Elon Musk has voiced strong objections to Donald Trump’s ambitious AI initiative known as Stargate. This has led to speculation about whether Musk’s criticism stems from jealousy over being overlooked or if there are more substantial issues at play.
Friendship on the Rocks: Musk vs. Trump
In the lead-up to Trump’s inauguration, many observers believed that tech mogul Elon Musk and the then-president were nearly inseparable. However, that notion was quickly dispelled as Musk publicly expressed his dissatisfaction with Trump’s new administration within just two days. The multi-billion dollar Stargate project, unveiled at the White House, has particularly incited Musk’s ire. He remarked on his social media platform X that the initiative is ‘inadequately funded,’ asserting, ‘They actually don’t have the money.’ Musk labeled Stargate a ‘fake’ initiative and criticized OpenAI’s CEO, Sam Altman, as a ‘swindler.’
Moreover, Musk didn’t hold back on SoftBank CEO Masayoshi Son, stating that SoftBank has secured ‘significantly under ten billion’ dollars for Stargate, which he claims to know from a ‘reliable source.’
With the Stargate initiative, President Trump aims to showcase strength against global competitors like China and Europe, and possibly even Musk himself. While Son has chosen to remain silent regarding Musk’s allegations, Altman quickly rebutted, calling Musk’s claims ‘false’ and asserting that Stargate is ‘great for our country.’
Investors in the Stargate project include major players like Oracle and Abu Dhabi’s state AI fund, MGX. Trump announced a staggering commitment of $500 billion for the project over the next four years, with initial investments of more than $100 billion already planned. However, uncertainties loom about the actual funding sources for Stargate, leaving many questions unanswered.
Reports suggest that OpenAI and SoftBank are each looking to invest $19 billion, yet the remaining $62 billion necessary for the initial phase remains unaccounted for. Where will the additional $400 billion come from for the long-term vision of this initiative?
Despite these uncertainties, a source involved in the project has assured that the initial $100 billion is secured through equity from founding partners, co-investors, and external funding, including debt capital. This ambitious expansion of AI infrastructure has positively affected Wall Street’s outlook.
Yet, the question arises: Why is Musk so vocally opposed to Trump’s Stargate initiative, especially as he serves as a ‘special advisor for deregulation’ in the new administration? Altman insinuates that Musk’s motives may be personal, stating on X, ‘I understand that what is great for our country is not always the best for your company, but I hope that in your new role you will prioritize the USA above all else.’
This remark prompts speculation about whether Musk’s disdain for Stargate is rooted in personal grievances stemming from being sidelined in this major AI venture. A bitter feud has been brewing between Musk and Altman, with Musk labeling Altman as ‘untrustworthy’ and Altman referring to Musk as a ‘tyrant’ in various interviews.
Musk, who co-founded OpenAI in 2015 before departing in 2018, has since established xAI as a rival and even filed a lawsuit against OpenAI for straying from its original non-profit mission.
As the AI race heats up, analysts like Karl Keirstead from UBS note that Musk’s criticism may also be driven by competitive interests. He asserts that the Stargate initiative is a significant win for OpenAI, positioning them favorably against Musk’s xAI and other tech giants in the pursuit of Artificial General Intelligence (AGI). Currently, OpenAI’s valuation stands at over $150 billion, dwarfing Musk’s xAI, which was recently valued at $50 billion.
In conclusion, Musk’s criticisms of the Stargate project cannot be easily brushed aside. The project is shrouded in uncertainty, particularly regarding its long-term financing. For the involved companies, providing concrete commitments and transparency is crucial to countering criticisms about potential financial shortfalls. However, it’s also clear that Musk’s motivations are intertwined with both personal and business interests.