Musk’s Ambitious Plan: Tesla Considers $5B Investment in xAI

MetaversePlanet July 25, 2024Last Updated: July 25, 2024

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Elon Musk wants Tesla to invest $5 billion in its own artificial intelligence startup, xAI. The CEOs of both companies have taken this proposal to X through a survey.

Tesla CEO Elon Musk asked whether Tesla should invest $5 billion in its own artificial intelligence startup, xAI, through a survey he posted on X, which he owns. Recently, xAI boasted the world’s largest AI training cluster. Musk also mentioned that the world’s most advanced artificial intelligence would be introduced this December.

Tesla could invest in xAI

Musk's Ambitious Plan: Tesla Considers $5B Investment in xAI

“Assuming the valuation is set by a few credible outside investors, should Tesla invest $5 billion in @xAI?” asked Musk in his informal survey. He also stated that in any case, a board and shareholder vote would be required. Currently, 68 percent of respondents have voted yes.

Musk, who simultaneously runs Tesla, SpaceX, The Boring Company, Neuralink, X Corp, and xAI, is facing challenges in the automotive sector. Tesla fell short of analysts’ expectations for the fourth consecutive quarter, with net income declining by 49% in the second quarter. Tesla and Musk are currently focusing on the robotaxi project and humanoid robots.

Musk’s companies often collaborate. While the scale here isn’t in the billions of dollars, SpaceX advertises its Starlink satellite internet services on X. The Boring Company builds tunnels at Tesla’s factory in Texas. Tesla’s possible investment in xAI could be valuable for developing autonomous vehicle software, such as Full Self-Driving (FSD). Founded in 2023, xAI reached a valuation of $24 billion last May. Given Musk’s frequent polling on X, such surveys hold significance. In 2021, he asked Twitter users if he should sell 10 percent of his Tesla stock and began selling shares just a few days after the survey.