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Elon Musk has once again turned the spotlight on Stargate AI, the much-publicized $500 billion infrastructure initiative led by OpenAI, SoftBank, Oracle, and others. In a blunt remark on X, Musk said, “They simply don’t,” referring to the group’s alleged inability to secure the massive funding required for the venture.
The statement follows months of speculation and now renews doubts over the project’s long-term viability.
Stargate AI was first introduced in early 2025 with grand ambitions. It aimed to build an expansive AI infrastructure across the U.S., supported by an initial $100 billion investment and a longer roadmap scaling up to $500 billion by 2029. Backed by tech giants and supported politically, the project carried hopes of job creation and U.S. leadership in AI.
However, financial cracks are beginning to show. Elon Musk, the CEO of rival AI firm xAI, claims that SoftBank, one of Stargate’s major financial players, has far less than what’s needed, reportedly under $10 billion in secured capital. According to insiders, the company is now heavily reliant on debt, with equity contributions declining.
OpenAI’s Sam Altman has pushed back, calling the funding solid and asserting that development continues. Still, internal disagreements between OpenAI and SoftBank over decision-making and execution have caused delays and forced a rethink of the plan’s scale.
Instead of multiple data hubs nationwide, the current focus appears to be a single site in Ohio. Meanwhile, OpenAI and Oracle recently announced plans to expand U.S. data center capacity by 4.5 gigawatts. Despite this progress, reports suggest that core decisions remain stalled behind the scenes.
Musk’s latest comments underscore a growing divide in the AI race. Stargate AI was meant to power next-generation infrastructure. But its uncertain funding, scaled-back vision, and internal friction now raise questions about how far the project can go.
Industry analysts believe that volatility will still be a concern. NVIDIA, AMD, and Arm have seen drops in prices with the buzz. Companies like AMD may be gaining, after all, as the alternative to NVIDIA for powering AI centers. Arm, on the other hand, continues to have a central role in Stargate's architecture with deployments underway in Texas.
Stargate AI commenced with a huge promise. However, without capital and cooperation, it risks being just another tech vision that gets lost in execution. Musk's skepticism could be beyond mere rivalry; it could suggest larger cracks in the foundation of a project that was once expected to establish American AI leadership.
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