Tesla may invest in Musk's AI start-up if shareholders agree
What's the story
Tesla CEO Elon Musk has announced that the company's shareholders will be polled on a potential investment in xAI, his artificial intelligence company. The announcement comes after reports that SpaceX is ready to invest $2 billion into the Grok chatbot developer. Musk clarified on X (formerly Twitter) that any decision to support the start-up isn't solely his call.
Past inquiry
Musk had asked Tesla shareholders if they support investment
Last year, Musk had asked X users if Tesla should invest $5 billion in xAI. He said he was just "testing the waters" then. However, he had also noted that such a decision would require approval from the EV maker's board and backers. Now, he has reiterated this by saying that a shareholder vote will be held on the matter.
xAI's journey
xAI's merger with X
Musk founded xAI in early 2023, after OpenAI launched ChatGPT and sparked an AI frenzy. The company has since merged with social media platform X in a deal that Musk said valued the AI start-up at $80 billion and the social network company at $33 billion. The potential investments come as the combined entity XAI Holdings is reportedly seeking funds at a valuation of up to $200 billion.
Business integration
Grok to be integrated into Tesla vehicles
This month, Musk announced that Tesla will integrate Grok into its vehicles. This comes despite the bot posting antisemitic content on X. The move indicates a deeper partnership between the two companies, something some Tesla investors have been advocating for amid declining EV sales. In April, Tesla revealed that xAI was a customer last year with $198.3 million in expenses related to commercial, consulting and support agreements with the carmaker.