Microsoft and OpenAI spar with Elon Musk’s more than $500 billion Stargate project

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OpenAI and Microsoft have hit back at Elon Musk’s criticism of Stargate, the new $500 billion artificial intelligence infrastructure project hailed by Donald Trump as “a stunning statement of our strong faith in America’s capabilities under the new president.”

An unusual break with Trump Musk On Tuesday night, he poured cold water on the project, saying, “They really don’t have the money.” He added that SoftBank had “on good authority” that it had raised less than $10 billion.

Sam Altman, CEO of OpenAI, responded to Musk’s claim on Wednesday, saying, “Of course, you know it’s wrong.”

“I understand that what is best for the country is not always what is best for your companies, but I hope you will put[America]first in your new role,” he wrote.

Although Stargate’s founding investors – SoftBank, OpenAI, Oracle and MGX, the AI ​​fund of Abu Dhabi State – have put some of their own capital into the company, a large part of the initial $100bn is expected to come from new investors. According to a person involved in the project, it is not yet known.

Another person involved said the funding was a combination of equity from co-founders and investors as well as debt, but added, “We are ready to deploy $100 billion immediately.”

Musk, who chairs the newly formed Department of Government Efficiency, has been embroiled in a long-running feud with OpenAI, Altman and the startup’s biggest backer, Microsoft. Musk was a co-founder of OpenAI, but left the board in 2018 after a clash with Altman.

The CEO of Tesla launched several lawsuits against the two companies and Altman, who violated their mission to create widely useful AI models by prioritizing profits.

Their spat could now strain Musk’s relationship with the new president, who has presented the project as an early victory in his plan to invest in the U.S. through low taxes and regulation.

Trump unveiled Stargate at the White House on Tuesday, joined by Altman, SoftBank Chairman Masayoshi Son and Oracle founder Larry Ellison.

The president suggested that Stargate would create 100,000 jobs and represent a victory over China, helping to secure the “future of technology” in the US. He also said he would use “emergency declarations” to quickly get the large amounts of electricity he needs.

In an interview with CNBC on Wednesday, Microsoft CEO Satya Nadella said his company has $80 billion in capital spending separate from Stargate this year. “All I know is that I’m good for $80 billion,” he said.

Shares in Japan’s SoftBank jumped more than 10 percent on Wednesday after Trump announced a joint venture that plans to spend $100 billion on technology infrastructure.

Other public companies involved in Stargate also saw their stock prices rise. Oracle gained 7 percent, while ARM, NVIDIA and Microsoft – technology partners in the project – gained 17 percent, 4 percent and 3 percent, respectively. OpenAI, which powers the project, is not publicly traded.

SoftBank and OpenAI declined to comment. MGX and Oracle did not immediately respond to requests for comment.