Elon Musk Tried to Block OpenAI’s Middle East Deal—but Failed
Elon Musk reportedly attempted to block OpenAI from securing a major artificial intelligence infrastructure deal in the Middle East unless his own AI company, xAI, was included—but his efforts fell short.
The deal, announced last week, involves OpenAI and several top U.S. tech firms partnering with G42, a leading Emirati AI company, to develop a massive data center complex in Abu Dhabi. The project, part of a broader initiative called Stargate UAE, is expected to become one of the largest AI computing hubs in the world. The facilities will be powered by advanced chips from Nvidia and supported by infrastructure from companies like Oracle, Cisco, and SoftBank.
According to The Wall Street Journal, Musk learned about the deal shortly before a recent visit to the Gulf by U.S. officials, including OpenAI CEO Sam Altman. Realizing a major agreement was imminent, Musk reportedly became upset and demanded that xAI be included in the initiative. During a call with executives from G42—a company chaired by UAE national security adviser Sheikh Tahnoon bin Zayed, brother of the country’s president—Musk is said to have warned that former President Donald Trump would not approve the deal unless xAI had a role.
Despite his pressure campaign, the deal moved forward without Musk’s involvement. While the White House reportedly reviewed the agreement in response to Musk’s objections, it ultimately allowed the partnership to proceed as planned. One official told WSJ that Musk had framed his concern as a call for “fairness for all AI companies,” but others pointed to Musk’s ongoing rivalry with Sam Altman as a likely factor.
Musk and Altman co-founded OpenAI in 2015, but their relationship deteriorated over time. In 2018, Musk proposed merging OpenAI with Tesla, a move rejected by Altman and other board members. The disagreement led Musk to walk away from the company, with Altman taking over as CEO. Since then, tensions have escalated. Earlier this year, Musk sued OpenAI and Altman, claiming they had abandoned the company’s founding mission to build open-source, nonprofit AI models.
Meanwhile, Musk has pursued his own AI venture, xAI. Despite raising $6 billion and securing some partnerships—including a recent Boring Company tunnel project in Dubai—xAI has yet to match OpenAI’s scale or influence in the industry.
The Stargate UAE project marks a significant step in global AI infrastructure development. Under the plan, G42 and its U.S. partners will build a major data center in Abu Dhabi and commit to equivalent investments in U.S.-based facilities. The first phase is expected to go live next year.
Musk’s objections to the UAE deal echo his earlier criticism of the original Project Stargate announced in the U.S. earlier this year. That initiative, a $500 billion AI investment plan backed by Oracle, SoftBank, and Nvidia, also drew Musk’s ire. He questioned the credibility of its backers and accused them of monopolizing the future of AI.
Despite his objections, the Stargate projects are moving ahead—with or without Musk.
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