Tesla to Let Shareholders Vote on xAI Investment as Musk Rejects Merger

Prime Highlights

Elon Musk assures that Tesla shareholders will have the final say on whether the firm invests in his AI company xAI.
There is no acquisition of Tesla by xAI, says Musk, only seeking financial partnership.

Key Facts

Musk’s other firm SpaceX is investing $2 billion in xAI.
xAI is raising a combined $5 billion of new capital at an up to $200-billion valuation.

Key Background

Tesla CEO Elon Musk recently told that the future investment of the company in his artificial intelligence company, xAI, will be subject to the shareholders’ vote. Musk responded to a tweet asking Tesla to invest in xAI by saying it’s not up to him and the shareholders would decide. This move is indicative of Musk’s increasing desire to combine artificial intelligence across his whole business empire with open and transparent leadership.

The move follows a huge funding round for xAI, with Musk’s space company SpaceX set to invest $2 billion in the AI firm. The investment is part of a total $5 billion funding drive, which will set xAI for a leadership role in the space for generative AI. The firm, which was established in 2023, currently has more than $12 billion and just merged with X (also known as Twitter), taking its tentacles even further across the technology industry.

In spite of these money-making partnerships, Musk has categorically declared that he will not approve of any merger of xAI and Tesla. He has once again stated that while Tesla will be investing in the AI company, the two firms will remain distinct entities. This is proof of the operational autonomy requirements of Musk while at the same time realizing artificial intelligence research synergies between the firms.

xAI is working on its Grok conversational AI chatbot and intends to put it into its Tesla cars and Starlink terminals. The project reflects Musk’s larger aim of making his technology platforms AI-capable. As Tesla seeks its place in the future of this new world, the pending shareholder vote can be a turning point for the company’s AI future.