Musk casts doubt on Trump-backed Stargate project: 'They don't actually have the money'

Business magnate and X CEO Elon Musk has cast doubt on whether there is enough funding available to follow through on a 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 in the U.S. for the further development of AI, which holds the promise of increasing productivity by automating work. 

Larry Ellison, the chair of Oracle, also suggested that the project could make it easier to treat diseases such as cancer by possibly developing a customized vaccine by tying the technology with digital health records.

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The initial investment is expected to be $100 billion and could reach five times that sum. Microsoft, NVIDIA, investor MGX and the chipmakers Arm are also partners in the project. 

"The Stargate Project is a new company which intends to invest $500 billion over the next four years building new AI infrastructure for OpenAI in the United States. We will begin deploying $100 billion immediately," an announcement by OpenAI posted to X on Tuesday reads.

But Musk, who has had a fractured relationship with OpenAI CEO Sam Altman, suggested on X that the AI company does not have the cash to back up its announcement.  

"They don’t actually have the money," Musk tweeted on X in response to OpenAI’s post.

Musk then followed up his post by writing, "SoftBank has well under $10B secured. I have that on good authority."

But Altman clapped back on Musk’s assertions. 

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"Wrong, as you surely know. Want to come visit the first site already underway?" Altman wrote.

"This is great for the country. I realize what is great for the country isn't always what's optimal for your companies, but in your new role I hope you'll mostly put America first."

Altman also appeared to dial the situation down, commending Musk for being one of "the most inspiring entrepreneurs of our time."

In March, Tesla CEO Musk announced he was suing ChatGPT-maker OpenAI and Altman, among others, saying they had abandoned the company's original founding mission to develop open-source artificial general intelligence technology for the benefit of humanity over profits.

Meanwhile, a source familiar with Stargate told FOX Business that Stargate is prepared to deploy the $100 billion immediately.

The source said that the companies in the venture are in a good position to make the investments with the equity coming from well-capitalized founding partners, additional equity from co-investors, as well as third-party debt and other sources.

For instance, SoftBank had $24.3 billion of cash on its balance sheet as of Sept. 30, 2024, per latest earnings. As for earnings, SoftBank’s loan-to-value stood at 12.5%.

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MGX is understood to have $100 billion in capital commitments, and Oracle has $11 billion cash on its balance sheet, while OpenAI recently announced a capital raise of more than $10 billion, per the source. 

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

"All I know is I’m good for my $80 billion," Nadella said. "Customers can count on Microsoft with OpenAI models being there everywhere in the world, serving OpenAI models and other models."

FOX Business understands that the companies involved in Stargate have not decided on how they will break down the commitments towards the $500 billion figure. Some may put down more than others into the project.