Will Musk merge xAI with Tesla? Here's what he revealed
What's the story
Tesla CEO Elon Musk has hinted that a merger between his artificial intelligence start-up xAI and the EV company is "not out of the question." In an interview with CNBC, Musk was asked if he would integrate xAI into Tesla for more control over the EV company. To this, he replied, "Well, I guess anything is possible." However, he clarified there are no plans for such a merger at the moment.
Stock response
Tesla shares still down by 10% from their January peak
Following Musk's CNBC appearance, Tesla's stock rose slightly by 0.5% at market close from the previous day. However, it did fall slightly in after-hours trading. Despite an overall rise in May after Musk announced his DOGE departure, Tesla's shares are still down by around 10% from their January 2 value this year due to disappointing Q1 sales and waning confidence in Musk's priorities.
xAI's growth
xAI's acquisition of X and its valuation
Musk founded xAI in 2023. In March this year, the AI start-up acquired X (formerly Twitter) in an all-stock deal that valued xAI at $80 billion and X at $33 billion. As part of this acquisition, an AI chatbot named Grok was integrated into X and trained using data from the platform. This move signifies Musk's growing influence in both the AI and social media sectors.
Chip sourcing
Tesla and xAI's chip sourcing strategy
In the same interview, Musk confirmed that both Tesla and xAI will continue sourcing AI chips from NVIDIA and AMD. He also revealed that xAI has already installed 200,000 GPUs at its Colossus data center in Memphis, Tennessee. There are also plans for a larger site nearby with one million GPUs. According to Business Insider, xAI is also investing at least $400 million to build a supercomputer in Memphis.