Musk tried to block OpenAI’s UAE deal unless xAI was included, say officials

Musk tried to block OpenAI’s UAE deal unless xAI was included, say officials

Elon Musk privately pressured officials in the United Arab Emirates to block a multibillion-dollar artificial intelligence data centre deal led by OpenAI—unless his own company, xAI, was given a seat at the table. According to White House and company insiders, Musk warned G42, a key Emirati AI firm, that the US government under President Trump would not approve the deal without xAI’s involvement, the Wall Street Journal reported.

Musk’s intervention came after he learned in mid-May that OpenAI CEO Sam Altman would be part of President Trump’s diplomatic tour of the Gulf region. Musk, who had co-founded OpenAI but fell out with Altman years ago, quickly joined the trip, appearing publicly with Trump in Saudi Arabia while working behind the scenes to influence the outcome of the deal.

Trump administration reviewed deal after Musk’s objection
While Musk reportedly expressed concerns about fairness in AI opportunities, officials said his real issue was ensuring Altman didn’t benefit without him. White House aides and President Trump ultimately decided to proceed with the plan, knowing that a delay could jeopardize a headline announcement timed with the president’s Middle East visit.

Trump adviser David Sacks and officials involved in the negotiations had to walk a fine line—satisfying Musk while avoiding derailment of a deal they saw as crucial to the administration’s technology diplomacy.

The scale of the Stargate UAE project
The deal with the Emirati firm G42—called Stargate UAE—involves construction of a massive five-gigawatt AI data centre cluster in Abu Dhabi. G42, funded by UAE national security adviser Sheikh Tahnoon bin Zayed al Nahyan, agreed to pay for the project and build a similar complex in the US, a move that helped secure US government backing after Tahnoon’s March visit to the White House.

Alongside OpenAI, the initiative includes US tech heavyweights such as Oracle, Nvidia, Cisco, and SoftBank. Notably absent at the time of the announcement: Musk’s xAI.

History of rivalry and rising influence
Musk’s opposition to OpenAI runs deep. Since leaving the company in 2018 after a power struggle with Altman, Musk has frequently attacked him, filed lawsuits, and launched xAI as a rival. Yet while OpenAI’s ChatGPT has seen global success, xAI has struggled to reach similar traction—despite raising $6 billion from investors including the UAE’s MGX fund.

Musk’s leverage stems not just from business interests but political ties. As one of the Republican Party’s largest donors, he has spent hundreds of millions backing Trump’s re-election and is a close policy adviser. Although he recently stepped away from the White House’s government efficiency task force, his role in shaping US tech strategy remains strong.

Musk still poised to benefit from future deals
Despite not being in the initial Abu Dhabi project, xAI is on a short list of US firms pre-approved to receive some of the 500,000 chips allowed annually under the US-UAE tech pact. It’s likely Musk’s company could participate in future phases of the AI cluster.

Officials insist that the current arrangement reflects a balance of strategic needs: strengthening US tech leadership abroad while reinforcing diplomatic and business ties with one of its key Middle Eastern partners.

As tensions between Altman and Musk continue to surface publicly and privately, the global AI race is increasingly shaped not just by innovation—but by personalities, politics, and geopolitical influence.