Elon Musk's Attempt to Block OpenAI's UAE AI Deal with Sam Altman

Elon Musk's Attempt to Influence AI Deal Faces Setbacks

In a significant development in the AI sector, Elon Musk made a bid to alter a major artificial intelligence infrastructure agreement in the Middle East, as CNBC confirmed. This move came after Musk's startup, xAI, was excluded from the initiative.

Earlier this month, OpenAI, alongside Oracle, Nvidia, Cisco, and G42 from the UAE, announced their collaboration on the expansive Stargate AI campus in the United Arab Emirates. Sources familiar with the situation revealed that Musk, frustrated by the involvement of OpenAI, managed by his rival Sam Altman, intervened to have xAI included in the project.

According to an insider, Musk contended that President Donald Trump would not endorse the agreement. The announcement was postponed for several days due to Musk's objections, which required attention from involved parties, including the White House. This incident was initially reported by the Wall Street Journal.

White House press secretary Karoline Leavitt released a statement to CNBC regarding the matter, "The United States and the UAE signed a groundbreaking framework agreement establishing the first AI acceleration partnership. The framework advances the buildout of AI infrastructure in the United States and the UAE. This was another great deal for the American people, thanks to President Trump and his exceptional team."

Reports indicate that Musk was not present in the UAE during the agreement's signing, but he was in Saudi Arabia with the president earlier in the Middle East tour. A senior White House official stated that Musk expressed his concerns regarding fair treatment for all AI companies.

While neither OpenAI nor Musk provided comments to CNBC, Musk's association with the Trump administration adds layers to his involvement in AI. Having spent nearly $300 million on Trump's re-election, Musk has been an integral part of the Department of Government Efficiency (DOGE), which he will be leaving soon.

Musk's history with Altman and OpenAI reflects longstanding tensions. Despite their joint founding of OpenAI in 2015, Musk has been critical of the project's evolution. In recent times, xAI has been forging its path, acquiring Musk's social platform X and teaming up with Telegram to launch the Grok chatbot.

Legal battles have also been part of Musk's strategy against OpenAI. He filed a lawsuit for breach of contract and attempted, albeit unsuccessfully, to purchase controlling interest in OpenAI for $97.4 billion.

This is not Musk's first critique of the Stargate project. In January, when President Trump introduced the initiative with OpenAI, Oracle, and Softbank pledging up to $500 billion for AI infrastructure in the U.S., Musk questioned the financial backing of the project. He claimed that the funds were not fully secured, particularly from SoftBank.

Later developments saw SoftBank leading a $40 billion investment in OpenAI, valuing the company at $300 billion.

— CNBC's Eamon Javers contributed to this report.

WATCH: Elon Musk tried to block Sam Altman’s big AI deal in the UAE