Musk’s Power Play: How He Tried to Sway a Massive AI Deal in Abu Dhabi—and Failed
Published on May 28, 2025 | By Vivalasupland Team
Just hours ago, a bombshell report revealed that Elon Musk, the tech titan behind Tesla and xAI, attempted to derail a monumental AI data center deal in Abu Dhabi. The deal, led by OpenAI and backed by the UAE’s G42, aimed to build one of the world’s largest AI campuses—a project that could reshape the global AI landscape. But Musk had a condition: include his company xAI, or the deal wouldn’t get President Trump’s approval. Spoiler alert: his bluff didn’t work.
A High-Stakes Game in the Desert
The UAE has been aggressively positioning itself as a global AI powerhouse, and this deal was a cornerstone of that ambition. Signed on May 15, 2025, during President Trump’s Middle East tour, the agreement greenlit a 10-square-mile AI campus in Abu Dhabi with a 5-gigawatt capacity—enough to power millions of Nvidia chips. OpenAI, alongside U.S. tech giants, secured the deal, which promised to expand their Middle Eastern footprint while countering China’s growing tech influence.
But Musk, a longtime rival of OpenAI’s CEO Sam Altman, wasn’t about to let this happen without a fight. Sources report that Musk contacted G42 officials, warning that Trump wouldn’t bless the project unless xAI was part of the package. It was a bold move, leveraging his close ties to the President, but the White House pushed forward regardless, leaving Musk’s xAI on the sidelines.
Why Musk Made His Move
Musk’s motivations are clear: xAI is racing to catch up in the AI arms race, and being excluded from a deal of this magnitude could set his company back years. xAI, which powers the Grok chatbot, has already raised $6 billion and built the world’s largest supercomputer in Memphis. But OpenAI’s dominance, bolstered by partnerships with Microsoft and now G42, threatens to widen the gap.
The feud between Musk and Altman dates back to 2015, when they co-founded OpenAI. Musk left in 2018 after a power struggle, and their rivalry has since escalated. Earlier this year, Musk made a $97.4 billion bid to buy OpenAI, which Altman swiftly rejected. Now, with OpenAI securing massive deals like this one in Abu Dhabi, Musk’s frustration is palpable.
The UAE’s AI Ambitions
For the UAE, this deal is a game-changer. The Gulf state has invested billions to become a global AI hub, balancing its alliances with the U.S. and China. Under the Biden administration, the UAE faced restrictions on accessing U.S. AI chips due to fears of Chinese influence. Trump’s administration, however, has taken a more permissive stance, requiring U.S. companies to manage the data centers and ensuring security protocols to prevent technology leaks.
G42, the Emirati firm leading the project, has deep ties to both U.S. and Chinese tech ecosystems. It has invested in OpenAI and xAI, but under U.S. pressure, it recently divested from Chinese hardware and investments. The Abu Dhabi campus will not only boost the UAE’s tech capabilities but also position it as a key player in the U.S.-led effort to counter China’s AI advancements.
What’s at Stake in the Global AI Race?
This failed power play by Musk underscores the high stakes in the global AI race. The U.S. remains the leader in AI innovation, but China is rapidly closing the gap. Deals like the one in Abu Dhabi are critical for maintaining U.S. dominance, as they secure allies and expand access to advanced chips and infrastructure.
For OpenAI, the deal strengthens its position as a frontrunner in AI development. The company will gain significant funding to build U.S. data centers, further fueling its growth. For Musk and xAI, however, this is a setback. Excluded from the Abu Dhabi project, xAI must now find other ways to scale its infrastructure and compete.
The X Platform Reacts
News of Musk’s failed attempt has set X ablaze. Users are buzzing with opinions, some praising Musk’s audacity, others mocking his overreach. “Musk tried to flex on Altman and got shut down—classic!” one user posted. Another wrote, “This is why the UAE deal matters: it’s not just about AI, it’s about who controls the future.” The hashtag #AIGulfDeal is trending, reflecting the global interest in this tech showdown.
What’s Next for AI and Geopolitics?
As the Abu Dhabi campus moves forward, the tech world will be watching closely. Will the UAE become the AI hub it aspires to be? Can OpenAI maintain its lead amidst fierce competition? And how will Musk respond to this latest defeat? One thing is certain: the battle for AI supremacy is heating up, and the Middle East is now a key battleground.