Elon Musk reportedly tried to block a major artificial intelligence deal between OpenAI and the United Arab Emirates (UAE) unless his company, xAI, was included, according to a new report by The Wall Street Journal.
The deal, announced last week, involves OpenAI and a group of US tech giants, including Oracle, NVIDIA, Cisco, and SoftBank, building one of the world’s largest AI data centers in Abu Dhabi.
OpenAI described it as “our first OpenAI for Countries partnership [that] expands global AI infrastructure and access, in coordination with the U.S. government.” The UAE, eager to diversify its economy beyond oil, is heavily investing in AI infrastructure. As part of the agreement, G42 will fund the construction of the Abu Dhabi site and a similarly sized project in the US.
But behind the scenes, Musk allegedly pushed to derail the agreement, warning UAE officials that President Donald Trump wouldn’t support it unless xAI was part of the project.
Musk’s sudden Middle East trip and warning to UAE officials
Musk learned just before Trump’s mid-May tour of Gulf countries that OpenAI CEO Sam Altman was joining the trip and that a major AI deal was in the works. According to White House officials, Musk was furious and decided to join the trip himself, appearing alongside Trump in Saudi Arabia.
During a call with officials from G42, Musk reportedly warned that the deal had “no chance” of Trump’s approval unless xAI was included.
Despite Musk’s objections, Trump and US officials reviewed the terms and decided to move forward. White House aides even discussed how to “calm Musk down” so the deal could be announced before the end of Trump’s Middle East trip, according to the Journal.
A deepening rift between Musk and Altman
Altman and Musk co-founded OpenAI in 2015, but Musk left in 2018 after internal disagreements. Since then, the rivalry between Musk and Altman has become personal and public; some examples include the following.
In 2023, Musk launched xAI to compete with OpenAI, but it has not yet reached the same level of commercial success.
Then, Musk sued OpenAI, accusing Altman of betraying the company’s nonprofit mission. OpenAI filed a countersuit against Musk.
Musk’s frustration over being sidelined was also evident in January 2025 during the announcement of Stargate US, a domestic $500 billion AI project led by OpenAI and backed by the Trump administration. According to the Journal, Musk was blindsided and took to X, his social platform, to criticize that deal as well.
In February 2025, Musk and a consortium of investors proposed a $97.4 billion bid to acquire control of OpenAI, which was rejected by the company’s board of directors.
Political ties and power moves
Musk’s influence in Republican circles is significant; he has donated about $300 million to help re-elect Donald Trump and was a close adviser during the campaign. He recently stepped down from the White House’s Department of Government Efficiency task force to focus on his companies: X, Tesla, xAI, SpaceX.
Despite Musk’s political weight, Trump and his aides ultimately chose to move forward with the Stargate UAE deal without including xAI. A senior White House official told the Journal that Musk “raised concerns about the deal and relayed his concerns about fairness for all AI companies.”
White House press secretary Karoline Leavitt praised the final deal, calling it “another great deal for the American people, thanks to President Trump and his exceptional team.”
