Musk cast doubt on Trump-backed Stargate project: ‘They really don’t have the money’

Business magnate and X CEO Elon Musk has raised doubts about the lack of funding to follow through on the massive $500 billion artificial intelligence (AI) infrastructure project announced by President Donald Trump on Tuesday.

The new project, called Stargate, will see Softbank, OpenAI and Oracle join forces to build data centers for further AI development in the US.

Oracle Chairman Larry Ellison also pointed out that the project would combine the technology with digital health records to develop a customized vaccine that would make it easier to treat diseases such as cancer.

Trump announced the largest AI infrastructure project ‘in history’, involving SoftBank, OpenAI and Oracle.

The initial investment is expected to be 100 billion dollars and it can reach five times that sum. Microsoft, NVD, investor MGX and chip maker ARM are partners in the project.

“The Stargate project is a new company that intends to invest $500 billion over the next four years to build a new AI infrastructure for OpenAI in the United States. We will start deploying $100 billion immediately,” OpenAI announced on Tuesday.

But Musk, who has had an estranged relationship with OpenAI CEO Sam Altman, suggested on X that the AI ​​company doesn’t have the money to fund the announcement.

In response to OpenAI’s post, Musk tweeted that they “really don’t have the money” on X.

” Musk then followed up the post by writing, “SoftBank is safe under $10B. I have it on good authority.

But Altman clapped back at Musk’s assertions.

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“Wrong, as I’m sure you know. Would you like to visit the first site in progress?” Altman wrote.

“This is good for the country. I realize what’s best for the country isn’t always what’s best for your companies, but I hope you’ll mostly put America first in your new job.”

Altman also appeared to cap it off, with Musk praising him for being one of the “most inspiring entrepreneurs of our time.”

In March, Tesla CEO Musk abandoned the company’s founding mission to develop open-source artificial general intelligence technology, including ChatGPT maker OPNY and Altman, for the benefit of humanity rather than profit.

Meanwhile, Stargate is ready to deploy $100 billion immediately, a source familiar with Stargate told Fox Business.

Companies in the sector are well-positioned to invest from well-capitalized founding partners, additional equity from joint investors, as well as third-party debt and other sources, the source said.

For example, SoftBank had $24.3 billion in cash at its most recent earnings as of September 30, 2024. As per earnings, Softbank’s loan-to-value stood at 12.5 percent.

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MGX is understood to have $100 billion in capital commitments, Oracle has $11 billion in cash on its balance sheet, and OpenAI recently announced a capital raise of over $10 billion, according to sources.

Microsoft CEO Satya Nadella said on Wednesday that Microsoft is committing $80 billion to the project when asked by CNBC about Musk’s comments.

“All I know is that I’m good for $80 billion,” Nadella said. “Customers can trust Microsoft. OpenAI models are available everywhere in the world, serving OpenAI models and other models.”

Fox Business has not decided how the companies involved in Stargate will break the $500 billion pledge. Some may throw more than others into the project.