Elon Musk Puts xAI’s Fate in Tesla Shareholders’ Hands – Will They Bite?
Elon Musk just kicked the AI investment can down the road—straight into Tesla shareholders' laps. The tech titan's latest power move shifts responsibility for xAI's funding future to the very people who've ridden Tesla's rollercoaster for years.
Who holds the purse strings now?
With one boardroom maneuver, Musk transforms Tesla's investor base into xAI's de facto venture capital committee. The same crowd that cheered Bitcoin purchases and groaned at Cybertruck delays now gets to weigh in on artificial intelligence's risk-reward equation.
Wall Street analysts are already placing bets—will shareholders demand AI returns faster than a Ludicrous Mode acceleration, or treat this like another 'funding secured' meme? Either way, the house always wins.
xAI expands further ties with Tesla
xAI, which was established by Musk in 2023, has yet to make significant headway in the incredibly saturated AI field. Unlike competitors like OpenAI, Anthropic, and Google DeepMind, xAI hasn’t signed any big corporate customers or made itself broadly available to developers.
Its main product is a chatbot named Grok, which has generated excitement for its potential as a way to plug into X. Grok is meant to be more cutting and sarcastic than the average chatbot. Musk has claimed that it is more “honest” than ChatGPT.
xAI isn’t a one-off; it already has a partnership with Tesla, despite what made news today. The startup is a Tesla Energy business customer and buys Megapack utility-scale batteries. Tesla has big plans for Grok in its vehicles, where AI will offer services to drivers and passengers.
The momentum behind xAI is also supported by Musk’s other venture-backed companies. Bloomberg reported that SpaceX is committing about $2 billion to xAI in June. There are doubts whether Tesla, Musk’s most valuable and publicly traded company, would invest in the AI venture.
Musk has previously made the point that Tesla shareholders should get in on some of xAI’s likely expansion, since the two companies have some degree of technological overlap and shared leadership. “It’s a good idea for Tesla’s shareholders to have an exposure to AI,” Musk wrote on X earlier this year.
Musk unveils more big plans for Tesla shareholders
This wouldn’t be the first time Tesla shareholders have been asked to vote on a controversial Musk-led proposal. In 2016, Tesla shareholders signed off on a $2.6 billion deal to buy SolarCity, a solar energy company founded by Musk’s cousins that was floundering at the time. That arrangement drew lawsuits and criticism for potential conflicts of interest, but Musk defended it as a long-term strategic decision.
Now, with Musk managing several companies, including Tesla, SpaceX, xAI, X, and Neuralink, among others, concerns about overlap and fair governance are flaring anew. Critics say Tesla, a public company with a fiduciary duty to shareholders, should be prudent in backing other Musk ventures unless there is a clear benefit.
Jumping back to 2023, Musk conducted an impromptu poll on X to see if users thought Tesla should pursue the development of xAI. A majority said yes. Musk later said that the company’s board would consider the possibility. But there has been no formal response — until now.
Should Tesla shareholders formally propose an investment and the motion be included in the upcoming annual meeting agenda, the vote would be an opportunity for a new chapter in Tesla’s strategy and a tighter alliance with Musk’s ever-expanding AI aspirations.
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