Screen capture from Prince Alwaleed bin Talal twitter account.
The diversified firm's interests include US-banking giant Citigroup.
A statement early on Saturday from Prince Alwaleed's office said his tweet was in response to Mr Trump's "anti-Islam statement".
Within hours, Mr Trump's response came back, also on Twitter.
"Dopey Prince @Alwaleed-Talal wants to control our US politicians with daddy's money," he said. "Can't do it when I get elected."
Mr Trump's comments have already cost him business in the Middle East, with a major chain of department stores halting sales of his glitzy "Trump Home" line of lamps, mirrors and jewellery boxes.
Screen captured from Donald Trump Twitter account.
On Thursday, Dubai real estate firm Damac, which is building a US$6 billion golf complex with Mr Trump, stripped the property of his name and image.
Mr Trump, the frontrunner for the Republican nomination, has been lambasted both in the US and abroad for his proposal made on Monday to temporarily bar Muslims from entering the US.
Mr Trump's comments followed a shooting rampage by a Muslim couple in San Bernardino, California, which left 14 dead. - AFP/Reuters
Already a subscriber? Log in
Get 20% OFF The Star Digital Access
Cancel anytime. Ad-free. Unlimited access with perks.
