Topline
Microsoft CEO Satya Nadella joined Elon Musk in taking a swipe at the Stargate artificial intelligence megaproject, unveiled earlier this week by former President Donald Trump. Nadella’s indirect critique came as a potential surprise, given Microsoft’s significant financial investment in OpenAI, the generative AI unicorn led by Stargate’s operations team.
Key Facts
In a viral clip from Wednesday, Nadella was asked by CNBC about Musk’s skepticism over whether Stargate had sufficient funding for the joint venture. Nadella quipped, “All I know is I’m good for my $80 billion,” referencing Microsoft’s planned investment in data centers announced on January 3.
Stargate revealed on Tuesday that it had $100 billion in initial funding and expected to secure $500 billion over the next four years.
Later, Nadella responded to Musk’s post on X, where Musk shared a clip of Nadella’s interview. Nadella clarified, “And all this money is not about hyping AI, but about building useful things for the real world!”
Despite Microsoft publishing a blog post confirming its role as a partner in Stargate and maintaining its position as a significant investor in OpenAI, it also noted that Microsoft is no longer OpenAI’s exclusive cloud computing provider.
Key Background
Stargate is a joint venture aimed at establishing physical infrastructure to support the immense data requirements for artificial general intelligence. Equity partners include OpenAI, Oracle, and investment firms like SoftBank and MGX, alongside their American, Japanese, and Emirati backers. The initiative was launched at the White House, with key figures such as OpenAI CEO Sam Altman, Oracle chairman Larry Ellison, and SoftBank CEO Masayoshi Son joining Trump for the announcement.
While Musk has recently been aligned with Trump, he criticized Stargate online, calling it “fake” and questioning its financial backing—claims a source familiar with Stargate’s funding dismissed.
Tangent
The Stargate controversy has fueled a personal feud between Sam Altman and Elon Musk. Altman implied Musk’s criticism stemmed from jealousy over OpenAI’s success compared to Musk’s AI venture, xAI. Musk, in turn, called Altman a “swindler” and brought up Altman’s past critiques of Trump. The rivalry dates back to OpenAI’s founding in 2015, where Musk was a cofounder before leaving the organization in 2018. Musk later sued OpenAI over its transition to a for-profit model.
What We Don’t Know
Microsoft’s exact ownership stake in OpenAI remains unclear. Between 2019 and 2024, Microsoft invested nearly $14 billion in the company, but the terms for converting these investments into equity are still uncertain. A complex profit-sharing agreement entitles Microsoft to $17 billion in OpenAI profits, followed by 49% of remaining profits up to a yet-undisclosed cap. OpenAI, valued at $157 billion in its most recent funding round in October, received close to $1 billion from Microsoft during that round, according to the Wall Street Journal.
