Musk suggests Tesla shareholders should vote on possible xAI investment

By Edwin Chan

 

Tesla Inc. plans to poll shareholders on whether to invest in xAI, Elon Musk said after the Wall Street Journal reported SpaceX was prepared to funnel $2 billion into the Grok chatbot developer. 

The billionaire entrepreneur, responding to a post on X, said any decision to back the startup ultimately wasn’t his to make. Musk asked X users publicly last year if Tesla should invest $5 billion in xAI, writing at the time that he was just testing the waters. But he said then that the EV maker’s board and backers would need to green-light such a decision. 

Musk set up xAI in early 2023, months after OpenAI ushered in the AI boom with the launch of ChatGPT. It’s since merged with the social media service X in a deal Musk said valued the AI startup at $80 billion and the social network company at $33 billion. 

 

The potential investments emerged as the combined entity XAI Holdings engages in talks to raise money at a valuation of as much as $200 billion, Bloomberg News has reported. They suggest Tesla’s billionaire chief executive officer is seeking to more closely entwine the various parts of his corporate empire.

 

This month, the CEO revealed Tesla will adopt Grok within vehicles — days after the bot posted antisemitic content on X. The integration suggests an expanded relationship between the two firms, something some Tesla investors have called for as EV sales have slumped. 

 

Tesla disclosed in April that xAI was a customer last year, with the startup incurring $198.3 million of expenses tied to commercial, consulting and support agreements with the carmaker. The bulk of that business — $191 million — involved xAI purchasing Tesla’s utility-scale energy storage batteries, called Megapack.