Elon Musk Polls Public on Tesla’s Potential $5 Billion Investment in xAI

Elon Musk Polls Public on Tesla's Potential $5 Billion Investment in xAI

Key Points:

  • Elon Musk posted a poll to the public on investing $5 billion of Tesla’s funds into his startup, xAI.
  • Tesla’s second-quarter earnings fell short of expectations, and its shares dropped over 7% after the update.
  • Shareholders questioned potential integrations of xAI’s Grok software into Tesla vehicles.
  • Formed in 2022, xAI develops AI models and software to compete with major tech companies.

Tesla CEO Elon Musk recently posted an informal poll on social network X, asking whether his publicly traded automaker should invest $5 billion in his newest startup, xAI. Musk asked: “Should Tesla invest $5B into @xAI, assuming the valuation is set by several credible outside investors? (Board approval & shareholder vote are needed, so this is just to test the waters).”

The poll came shortly after Tesla’s second-quarter earnings call on Tuesday evening, during which Tesla reported earnings that fell short of analysts’ expectations for the fourth consecutive quarter. The company also noted a decline in revenue from its core automotive segment despite seeing significant growth in energy storage sales. Tesla’s future focus remains on the development of robotaxis and humanoid robots. Following the earnings update, Tesla’s shares fell by more than 7% in after-hours trading.

Musk, who concurrently leads Tesla, SpaceX, The Boring Co., Neuralink, X Corp., and now xAI, has a history of intercompany collaborations but not on the scale of billions of dollars. For instance, SpaceX has purchased ad campaigns on X to promote its Starlink satellite internet services, and The Boring Co. is constructing tunnels at Tesla’s Texas factory.

During the earnings call, shareholders inquired if Tesla might invest in xAI and integrate its software, named Grok, into Tesla vehicles. Musk responded, “Tesla is learning quite a bit from xAI. It’s been actually helpful in advancing Full Self-Driving and in building up the new Tesla data center. With regards to investing in xAI, I think we’d need to have a shareholder approval of such investment. But I’m certainly supportive of that if shareholders are.”

Formed in March of last year and first discussed publicly by Musk in July 2023, xAI focuses on developing large language models and AI software products to compete with offerings from Google, Microsoft, OpenAI, Meta, and others. AI chatbots can generate story ideas, create transcripts, compile action items from meeting notes, edit code, and translate ideas between languages.

Neither Musk nor Tesla provided further information on why xAI was not initially incubated at Tesla. Previously, xAI raised a $6 billion series B funding round and achieved a post-money valuation of $24 billion, according to a company blog post from May 27.

EDITORIAL TEAM
EDITORIAL TEAM
TechGolly editorial team led by Al Mahmud Al Mamun. He worked as an Editor-in-Chief at a world-leading professional research Magazine. Rasel Hossain and Enamul Kabir are supporting as Managing Editor. Our team is intercorporate with technologists, researchers, and technology writers. We have substantial knowledge and background in Information Technology (IT), Artificial Intelligence (AI), and Embedded Technology.

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