Elon Musk has dismissed the possibility of merging Tesla with xAI, but he expressed intentions to conduct a shareholder vote on Tesla’s potential investment in the artificial intelligence startup. This move aims to further strengthen the connections within his business ventures.
These remarks came after a report by the Wall Street Journal on Saturday, indicating that SpaceX, Musk’s aerospace company, plans to invest $2 billion in xAI. This investment is part of a $5 billion fundraising effort designed to stay competitive in the costly AI market.
Musk, Tesla and xAI did not respond to Reuters requests for comment.
Musk’s companies are already significantly interconnected. xAI’s Grok chatbot is being introduced into Tesla’s vehicles, and engineers from Tesla supported Musk following his acquisition of Twitter in 2022, which has now been rebranded as X.
Responding to a user post on X asking Tesla investors if they supported a merger between the two companies, Musk on Monday replied “No.” He had said on Sunday he would ask Tesla shareholders to vote on whether the automaker can invest in xAI.
“If it was up to me, Tesla would have invested in xAI long ago,” Musk had said on X.
D.A. Davidson analyst Gil Luria said Tesla already has access to xAI’s advanced models but could benefit from the startup’s rising value if it becomes a winner in AI.
Integrating technology, talent and financial backing is a theme that runs across Musk’s empire of companies. Earlier this year, xAI acquired Musk’s X in a $33 billion deal that valued the combined group at $80 billion at the time.
That deal meant the X platform would come in handy to further distribute xAI products, while also providing a real-time feed of users’ posts and massive amounts of other data.
Investments into xAI would help Grok better compete with OpenAI’s ChatGPT by increasing capital toward research and development.
“xAI will require tens of billions of dollars of investment in order to continue on its current path… With a board that has been very supportive of Mr. Musk in the past, we would expect that Tesla capital to be available to xAI,” Luria said.
xAI recently launched Grok 4, its latest flagship AI model. While Musk has touted it as “the smartest AI in the world,” Grok usage still lags ChatGPT.
