Key Points
- Elon Musk has ruled out a merger between Tesla and his AI startup, xAI. He wants Tesla to invest in xAI instead and will hold a shareholder vote on it.
- The investment would help fund xAI’s chatbot, Grok, to better compete with rivals like ChatGPT.
- This is part of Musk’s broader strategy of integrating his companies, like Tesla, SpaceX, and X.
- The companies already cooperate, with xAI’s Grok chatbot being added to Tesla cars.
Elon Musk has shut down the idea of a full merger between Tesla and his artificial intelligence startup, xAI. However, he does want the car company to invest in the AI firm and plans to put the idea to a shareholder vote.
This move is the latest example of Musk weaving his various companies—including Tesla, SpaceX, and X (formerly Twitter)—closer together. His comments come after a report that his rocket firm, SpaceX, is investing $2 billion into xAI as part of a larger $5 billion funding round. This cash injection is crucial for xAI to keep up in the expensive race to build powerful AI.
Musk’s companies already share close ties. Tesla is starting to roll out xAI’s Grok chatbot in its vehicles, and Tesla engineers famously helped Musk after he bought Twitter. When asked on X if he supported a merger between Tesla and xAI, Musk gave a simple “No.” But he also said he wished Tesla had invested in xAI “long ago.”
An investment from Tesla would give the carmaker a financial stake in a potentially booming AI company. For xAI, more funding is critical to develop its Grok chatbot and challenge competitors like OpenAI’s ChatGPT. The strategy fits a pattern: earlier this year, xAI acquired X in a massive deal, giving the AI firm access to a huge amount of real-time data from the social media platform.
Analysts believe xAI will need “tens of billions of dollars” to continue growing, and Tesla’s cash could be a key source, assuming its board agrees. Tesla shareholders will get their chance to weigh in on the potential investment at the company’s annual meeting on November 6.
