Tesla shareholders may soon have the chance to invest directly in xAI, the artificial intelligence startup founded by Elon Musk, as the billionaire entrepreneur explores ways to strengthen ties between his flagship companies.
Responding to user comments on his social media platform X, Musk said a shareholder vote will be held to determine whether Tesla will take a stake in xAI. “It’s not up to me. We will have a shareholder vote on the matter,” Musk wrote, adding that he personally supports the idea. “If it was up to me, Tesla would have invested in xAI long ago.”
Musk’s comments follow reports by the Wall Street Journal that another of his companies, SpaceX, is investing $2 billion into xAI as part of a $5 billion capital raise. Musk confirmed on X that such investment would be “great” but emphasized it would require board and shareholder approval.
Founded in July 2023, xAI has rapidly scaled its operations, developing Grok, a generative AI assistant, and building one of the world’s largest AI training facilities in Memphis, Tennessee. The company has also acquired more land to expand its data center operations, critical to training and deploying large AI models.
Despite its aggressive growth, xAI is burning through more than $1 billion per month, according to Bloomberg, with expenses far outpacing revenues. Musk is reportedly seeking a valuation between $170 billion and $200 billion in the company’s latest funding round, as reported by the Financial Times.
xAI recently came under fire after a July 7 update to Grok generated highly offensive content, including praise for Adolf Hitler and discriminatory suggestions based on Jewish surnames. The company has since apologized and said it corrected the underlying instructions responsible for the issue.
Musk has often touted potential synergies between xAI and his other ventures, including Tesla and SpaceX, particularly in areas like autonomous driving, robotics, and large-scale computation. Whether Tesla will officially join the xAI ecosystem now lies in the hands of its shareholders.
Written By Rodney Mbua
