Elon Musk wanted pause in OpenAI deal in Middle East, but his efforts failed

India Today

6 days ago

Elon Musk reportedly tried to block OpenAI from securing a high-profile artificial intelligence infrastructure deal in the Middle East unless his own AI company, xAI, was included — but his efforts failed. The deal in question, which was announced last week, involves OpenAI and several US tech companies partnering with G42, an Emirati AI company, to build a massive data centre complex in Abu Dhabi. The facility, which will be part of a larger initiative called Stargate UAE (under the Project Stargate that was announced in January this year), is expected to become one of the world's largest AI computing hubs. These hubs have servers powered by advanced chips from companies like Nvidia and operated by Oracle, Cisco, and SoftBank.advertisementAccording to a report by The Wall Street Journal, Musk had caught wind of the OpenAI deal shortly before US President Donald Trump's tour of the Gulf earlier this month. Learning that OpenAI CEO Sam Altman would be part of the trip and that a deal in the UAE was being finalised, Musk reportedly became irate and demanded his firm xAI be included in the project.Reportedly, in a call with G42 officials, a firm chaired by the UAE national security adviser Sheikh Tahnoon bin Zayed, the brother of the country's president, Musk allegedly warned that Trump would not approve any such deal unless xAI had a seat at the table.
Despite the pressure, the deal moved forward without Musk's involvement. White House officials reviewed the agreement following Musk's intervention but ultimately allowed it to proceed as planned. One official described Musk's concern as being about 'fairness for all AI companies,' though others noted his long-running rivalry with Altman may have played a role.advertisementMusk and Altman co-founded OpenAI in 2015. However, in 2018, Musk parted ways and left. There was apparently a power struggle, which was allegedly caused by a proposal by Musk to merge OpenAI and Tesla. The idea, according to Walter Isaacson's biography of Elon Musk, was rejected by Altman and other board members. After that, Musk walked away, and Altman took the reins as CEO. Since then, Musk and Altman have constantly been in a back and forth. Musk has also sued OpenAI and Altman for betraying the original mission of the company – which was to build open-source AI models with no profits.Meanwhile, some years ago, Musk launched his own AI venture, xAI, which has struggled to match OpenAI's success despite raising $6 billion in funding and securing partnerships in the Gulf region, including a recent tunnel-building deal between his Boring Company and Dubai.
Under the Stargate UAE project, G42 and its partners will reportedly fund construction of a massive data complex in Abu Dhabi while committing an equivalent investment to US-based AI facilities. The first phase of this arrangement will reportedly go live next year.Musk's annoyance to the OpenAI and UAE deal mirrors his earlier frustration when Trump and Altman unveiled the original Stargate project in the US earlier this year. The project is an ambitious $500 billion AI investment initiative, which is also backed by Oracle, SoftBank and Nvidia. At the time, Musk had criticised the deal's backers and questioned their financial credibility on social media.Tune In