Elon Musk Discusses Tesla’s Investment in AI
Elon Musk has dismissed the idea of a merger between Tesla and Xai, but announced plans for a shareholder vote concerning Tesla’s investment in artificial intelligence startups, marking a new phase in his efforts to integrate his various business ventures.
This statement follows a report from the Wall Street Journal indicating that Musk’s SpaceX is set to invest $2 billion in Xai as part of a $5 billion funding round. The aim here is to keep pace with its rivals in the competitive AI landscape, which is quite capital-intensive.
Nobody from Musk’s team at Tesla or Xai responded to requests for comments from Reuters.
The relationship between Musk’s companies is already quite strong. For instance, Xai’s Grok Chatbot has been integrated into Tesla vehicles, and Musk’s engineers have supported him after he acquired Twitter, now rebranded as X, in 2022.
When asked by X users about a potential merger between Tesla and Xai, Musk responded with a definitive “No” on Monday. He also indicated on Sunday that he would be seeking a vote from Tesla’s shareholders regarding the potential investment in Xai.
“If it were up to me, Tesla would have invested in Xai a long time ago,” Musk stated on X.
Analyst Gil Luria from Da Davidson suggested that although Tesla already benefits from access to Xai’s advanced models, further investment could enhance the value of the startup, particularly if it succeeds in the AI sector.
The integration of technology, talent, and financial support is a recurring theme across Musk’s various enterprises. Earlier this year, Xai completed a $33 billion acquisition of X, valuing the collective businesses at around $80 billion at that time.
This deal meant that the X platform could facilitate the distribution of more Xai products while also providing real-time user data and insights.
Investing in Xai is expected to enhance Grok’s competitiveness against OpenAI’s ChatGPT by allocating more funding for research and development.
“Xai needs hundreds of billions of dollars in investment to maintain its trajectory. With a board that has historically backed Musk, we anticipate that Tesla will capitalize on its investment in Xai,” Luria commented.
Xai recently introduced its new flagship AI model, Grok 4. Musk champions it as “the smartest AI in the world,” but it has yet to surpass ChatGPT in overall usage.
