Elon Musk has sought the opinions of X users regarding a potential $5 billion investment by Tesla Inc. in his artificial intelligence startup, xAI. The inquiry, framed as a “test of interest,” garnered a resounding endorsement from over two-thirds of the participants.
Musk’s question was posed on Tuesday, shortly after Tesla reported its fourth consecutive quarter of disappointing financial results. During the earnings call, the Tesla CEO was queried about the possibility of Tesla investing in xAI or incorporating xAI’s chatbot, Grok, into Tesla’s software suite.
Musk acknowledged that Tesla has been gaining significant insights from xAI, which have contributed to advancements in its Full Self-Driving technology. He expressed openness to the idea of a Tesla investment in xAI, contingent on shareholder approval.
Founded by Musk in early 2023, xAI emerged in the wake of OpenAI’s breakthrough with ChatGPT. Musk, a co-founder and major financial backer of OpenAI, resigned from its board in 2018 to avoid conflicts of interest with his Tesla role.
Concerns about conflicts of interest have resurfaced as Musk develops xAI. In April, Musk noted Tesla’s challenges in retaining AI talent, with some specialists leaving for xAI. Additionally, in June, Musk confirmed the diversion of crucial AI chips from Tesla to both X Corp. and xAI.
Amid these developments, xAI successfully completed a $6 billion funding round, bringing its valuation to approximately $18 billion. Prominent investors, including Sequoia Capital and Andreessen Horowitz, participated in what is considered one of the largest investments in generative AI to date.
Musk has previously sought shareholder approval for contentious deals, such as Tesla’s acquisition of SolarCity in 2016, a solar panel company managed by his cousins. Although shareholders approved the acquisition, Musk faced criticism for his role in the deal. In a 2022 legal case, while he overcame claims of undue influence, the judge criticized Musk for not adequately distancing himself from the transaction.
