Elon Musk Proposes Tesla Shareholder Vote on xAI Investment, Sparking Controversy and Speculation

Elon Musk promises Tesla shareholders a vote over buying equity in his Grok startup -- 'if it was up to me, Tesla would have invested in xAI long ago'

Elon Musk wants Tesla shareholders to help him consolidate control over his sprawling business empire by allowing his cash-rich EV company to invest in his latest startup, xAI. The company behind Grok is spending billions in an attempt to challenge OpenAI and its ChatGPT for leadership in the race to develop artificial general intelligence. Last week Musk unveiled the fourth generation of his Grok chatbot, which is currently rolling out to Tesla vehicles, just a day after setting a date for the carmaker's long-delayed annual meeting. "If it was up to me, Tesla would have invested in xAI long ago," Musk posted Sunday evening. "We will have a shareholder vote on the matter." The next opportunity would be in November, when Tesla is finally scheduled to hold its annual meeting. While Tesla did not respond to a Fortune request for further comment, speculation around Tesla investing in xAI does not come as a surprise. For starters, the Wall Street Journal reported on Saturday that Musk's privately-owned SpaceX company poured $2 billion into xAI despite limited business rationale (Musk tacitly confirmed the story). According to its sources, Grok is only used in some customer support features for SpaceX's satellite broadband service Starlink. Moreover, as Musk indicated, he has been eyeing a Tesla investment in xAI for some time. Roughly four weeks after Tesla's previous annual general meeting in June 2024, Musk ran a social media poll to this effect. In it, he asked X users -- only a small portion of whom were likely Tesla investors -- whether the car company should invest $5 billion "assuming the valuation is set by several credible outside investors". When two thirds of the nearly one million responses were in favor, Musk promised to discuss the issue with the board. Since then, however, there has been few new developments. That could be because using money that belongs to Tesla shareholders for the purchase of a stake in Musk's xAI is not so simple from a governance perspective. Even with a clear use case like the integration of Grok into Tesla EVs, there is a conflict of interest. For example, an investment would indirectly expose investors to X, acquired by xAI last year in an all-stock deal that valued the company formerly known as Twitter at $33 billion in equity and debt. With X repeatedly on the brink of bankruptcy, the transaction had the markings of a bailout, since Twitter was valued at $11 billion less than when Musk bought it. According to Bloomberg, catching up to rivals like OpenAI and Anthropic in the AGI race also has not come cheap for xAI. The startup founded two years ago is expected to burn through about $13 billion in cash this year. Musk appeared to dismiss the report when it was published last month, claiming "Bloomberg is talking nonsense", though he did not specify what precisely was incorrect. Just two weeks later, xAI raised $10 billion in fresh capital with the help of Morgan Stanley (SpaceX's investment reportedly was part of it). Rather unusual for a high-growth tech startup, half of that came from the debt market where investors attach clear strings to the loan in terms of repaying the balance plus interest. Nor has everything with Grok gone smoothly. Musk's AI chatbot went off the rails last week, spreading numerous antisemitic conspiracy theories on X while proudly declaring itself a mechanized version of Nazi leader Adolf Hitler. "We deeply apologize for the horrific behavior that many experienced," the official Grok account on X posted this weekend. The last time Tesla invested in another company that counted Musk as its largest shareholder was the widely criticized 2016 deal to purchase SolarCity for $2.6 billion. Investors challenged the deal as a bailout, with Musk eventually prevailing two years ago in a case that went all the way to the Delaware state supreme court. Nonetheless, AI is a very different shareholder value proposition than solar roofing, and a number of investors have argued in favor of buying an equity stake.

Tesla to offer shareholders chance to invest in xAI: Musk

New York (AFP) - Tesla will give its shareholders the option to invest in artificial intelligence startup xAI, billionaire owner of both companies Elon Musk said on his social media platform X. "It's not up to me... We will have a shareholder vote on the matter," Musk said in response to a social media user suggesting that the electric car maker take a stake in xAI, which recently acquired X. "If it was up to me, Tesla would have invested in xAI long ago," the world's richest man said. According to the Wall Street Journal, another company controlled by Elon Musk, SpaceX, will invest $2 billion into xAI as part of its $5 billion capital raise. Responding to an X user who cited the WSJ's news story, Musk said that "it would be great" but would depend on "board and shareholder approval." Since the launch of xAI -- which developed the generative AI assistant Grok -- Musk has floated the potential synergies between the AI start-up and his two crown jewels, SpaceX and Tesla. According to the Financial Times, the businessman is seeking a valuation between $170 and $200 billion for xAI in a new funding round. Launched in July 2023, xAI is hoping to catch up with its major generative AI competitors, OpenAI (ChatGPT), Anthropic (Claude) and Google (Gemini). The start-up has invested heavily in a gigantic data center in Memphis, Tennessee, which Musk claims will become the "most powerful AI training system in the world." He has purchased another plot of land nearby to create more data centers, which are essential for developing and running large-scale artificial intelligence models. According to Bloomberg, xAI is costing over a billion dollars every month as it builds upgraded models, with its expenses far exceeding its revenues. xAI's virtual assistant Grok has been the source of a series of controversies. After an update on July 7, some of the chatbot's responses praised Adolf Hitler and suggested that people with Jewish surnames were more likely to spread online hate. On Saturday, xAI apologized for offensive posts, announcing that it had corrected the instructions that had led, according to the company, to these slip-ups.

Tesla's Musk Says No xAI Merger Coming, But Open to Vote on Investment

The chatbot was added to Tesla vehicles in a beta test over the weekend. Tesla (TSLA) does not have any plans to acquire CEO Elon Musk's artificial intelligence startup xAI, but the electric vehicle maker could invest in the company, Musk said over the weekend. Questions about a potential deal arose after xAI's Grok was added to Tesla vehicles as a beta test program over the weekend, and after it was reported that SpaceX, another Musk company, is investing $2 billion in xAI. Users on X -- the social media platform formerly known as Twitter that Musk bought in 2022 and that merged with xAI earlier this year -- asked if Tesla shareholders would support a merger between the companies. "No," Musk responded simply in the early hours of Monday morning. In other posts earlier in the weekend, however, the CEO said he was in favor of the EV maker investing in xAI. "It's not up to me. If it was up to me, Tesla would have invested in xAI long ago," Musk posted on Sunday. "We will have a shareholder vote on the matter." Last week, a regulatory filing revealed that Tesla will hold its annual shareholder meeting on Nov. 6, when a vote on any investment could take place. Musk asked his followers last summer if Tesla should invest in xAI, adding later that he would discuss it with Tesla's board after just over two-thirds of the votes were in favor. It's unclear if those discussions happened, or whether Tesla has already invested in or paid xAI to have Grok added to Tesla vehicles. The world's richest person also over the weekend teased a potential product launch for Tesla later this year. "Just left the @Tesla design studio," Musk said. "Most epic demo ever by end of year. Ever." Tesla was expected to unveil a more affordable model in the first half of this year, though it's unclear if Musk is referring to that project or a demo for another Tesla product, such as upgrades to its self-driving software or new capabilities of Tesla's Optimus robots. Tesla shares were up 1% in premarket trading. They entered the day down more than 20% since the start of this year.

Tesla to offer shareholders chance to invest in xAI: Elon Musk

Elon Musk announced on X that Tesla shareholders may vote on investing in his AI startup xAI, which recently acquired social media platform X. The move hints at deeper synergies between xAI, SpaceX, and Tesla. According to the Financial Times, Musk is seeking a valuation between $170 and $200 billion for xAI in a new funding round. Tesla will give its shareholders the option to invest in artificial intelligence startup xAI, billionaire owner of both companies Elon Musk said on his social media platform X. "It's not up to me... We will have a shareholder vote on the matter," Musk said in response to a social media user suggesting that the electric car maker take a stake in xAI, which recently acquired X. "If it was up to me, Tesla would have invested in xAI long ago," the world's richest man said. According to the Wall Street Journal, another company controlled by Elon Musk, SpaceX, will invest $2 billion into xAI as part of its $5 billion capital raise. Responding to an X user who cited the WSJ's news story, Musk said that "it would be great" but would depend on "board and shareholder approval." Since the launch of xAI -- which developed the generative AI assistant Grok -- Musk has floated the potential synergies between the AI start-up and his two crown jewels, SpaceX and Tesla. According to the Financial Times, the businessman is seeking a valuation between $170 and $200 billion for xAI in a new funding round. Launched in July 2023, xAI is hoping to catch up with its major generative AI competitors, OpenAI (ChatGPT), Anthropic (Claude) and Google (Gemini). The start-up has invested heavily in a gigantic data center in Memphis, Tennessee, which Musk claims will become the "most powerful AI training system in the world." He has purchased another plot of land nearby to create more data centers, which are essential for developing and running large-scale artificial intelligence models. According to Bloomberg, xAI is costing over a billion dollars every month as it builds upgraded models, with its expenses far exceeding its revenues. xAI's virtual assistant Grok has been the source of a series of controversies. After an update on July 7, some of the chatbot's responses praised Adolf Hitler and suggested that people with Jewish surnames were more likely to spread online hate. On Saturday, xAI apologized for offensive posts, announcing that it had corrected the instructions that had led, according to the company, to these slip-ups.

Elon Musk Wants Tesla To Invest In xAI, But It's Up To Shareholders: This Analyst Says Grok Is Worth The Bet - Tesla (NASDAQ:TSLA)

Tesla Inc. TSLA CEO Elon Musk has made it clear he wants the company to invest in his artificial intelligence startup, xAI -- but says the final decision is now in shareholders' hands. What Happened: Responding to a post on X, formerly Twitter, Musk said, "It's not up to me. If it was up to me, Tesla would have invested in xAI long ago. We will have a shareholder vote on the matter." The statement follows a Wall Street Journal report that another Musk-led company, SpaceX, is preparing to invest $2 billion into xAI, the maker of the Grok chatbot. See Also: Jamie Dimon Warns Market May Be Underestimating Rate Hike Risks, Flags Investor Complacency Amid Trump Tariffs: 'Cause Of Concern' Following Musk's statement, Gene Munster, managing partner at Deepwater Asset Management, quickly weighed in, saying, "If Tesla's future is autonomy, then Tesla investors and the board should support the investment." "xAI can help power that future either as a partner or part of Tesla. The faster they can get cash, the higher the odds of success for both companies." Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Why It's Important: xAI was founded in 2023. In March, it was acquired Musk's social media platform X. In late June, Morgan Stanley revealed that xAI secured a $5 billion debt financing round along with an additional $5 billion strategic equity investment. This effort is part of the startup's plan to strengthen its AI infrastructure with new data centers as competition intensifies. Last week, after xAI announced the launch of Grok 4, Musk also confirmed in a reply to Tesla influencer Sawyer Merritt that Grok will be available in Tesla vehicles very soon, likely by this week. Benzinga's Edge Stock Rankings indicate that TSLA is trending downward in the short term but continues to show positive momentum over the medium and long term. The stock has a solid growth score, although its value rating is relatively lower. You can find more detailed performance insights here. Read Next: Jim Cramer Bearish At $40K: 'Unlikely That Bitcoin Finds Its Footing,' CramerTracker Replies: 'Legend, Thanks Jim!' - Benzinga Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Frederic Legrand - COMEO on Shutterstock.com TSLATesla Inc$315.610.67%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum47.32Growth90.85Quality50.15Value10.20Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Tesla Investment In xAI Hinges On Elon Musk Having 25% Voting Power: 'Level Is Key,' Says Dan Ives - Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), SPDR S&P 500 (ARCA:SPY)

Tesla Inc. TSLA CEO Elon Musk's push for a 25% voting power in the electric vehicle maker is pivotal for the company's potential investment in xAI, according to Wedbush Securities analyst Daniel Ives. What Happened: In a recent X post, Ives emphasized that this "level is the key" for Tesla's strategic move into artificial intelligence, aligning with Musk's vision to integrate xAI's capabilities, such as the Grok chatbot, into Tesla's ecosystem. This comes as Musk, currently holding a 22% equity stake in Tesla, seeks to bolster his control amid discussions of a shareholder vote on investing in xAI, reported by Bloomberg on July 14. Musk's current voting power, enhanced by Tesla's supermajority voting rules requiring two-thirds approval for major changes, already grants him significant influence. However, Ives argues that 25% is critical for navigating the complexities of AI development and potential mergers, especially after xAI's $33 billion acquisition of X and a reported $198.3 million spend on Tesla services, including Megapacks, as per a 2025 Bloomberg analysis. Despite Musk's readiness for a shareholder vote, as he stated on X, "It's not up to me. If it was up to me, Tesla would have invested in xAI long ago," challenges persist. See Also: Trump Wants Blanket Tariffs Of Up To 20% After Surprise Treasury Surplus In June: Ed Yardeni Says 'Don't Push Your Luck' Why It Matters: The Tesla boss had asked X users last year if Tesla should invest $5 billion in xAI. However, he had acknowledged that the robotaxi maker's board and backers would need to green-light such a decision. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started As Tesla shareholders prepare for this decision, the 25% threshold emerges as a battleground for control and innovation in Musk's corporate empire. Gene Munster, managing partner at Deepwater Asset Management, quickly weighed in, saying, "If Tesla's future is autonomy, then Tesla investors and the board should support the investment." "xAI can help power that future either as a partner or part of Tesla. The faster they can get cash, the higher the odds of success for both companies." Shares of Tesla have fallen by 17.34% on a year-to-date basis, but they were higher by 24.09% over the past year. It was up 0.95% in premarket on Monday. Benzinga Edge Stock Rankings shows that TSLA had a stronger price trend over the medium and long term but a weaker trend over the short term. Its momentum ranking was moderate, whereas its value ranking was poor; the details of all the metrics are available here. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, were lower in premarket on Monday. The SPY was down 0.29% at $621.80, while the QQQ declined 0.29% to $552.58, according to Benzinga Pro data. Read Next: Stanley Druckenmiller's Duquesne Dumps Palantir, Bets Big On This Dividend Play Which Has Surged Nearly 50% In 2025 Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image Credit: Mike Tripp/The News Leader Via Imagn QQQInvesco QQQ Trust, Series 1$552.60-0.29%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum66.71Price TrendShortMediumLongOverviewSPYSPDR S&P 500$621.68-0.31%TSLATesla Inc$316.911.08%Market News and Data brought to you by Benzinga APIs

Musk suggests Tesla investor vote on xAI investment, rules out merger

(Reuters) -Elon Musk ruled out a merger between Tesla and xAI but said he plans to hold a shareholder vote on investment in the artificial intelligence startup by the automaker, in the latest step to deepen integration across his business empire. His comments followed a Wall Street Journal report on Saturday that SpaceX, Musk's rocket firm, will invest $2 billion in xAI as part of a $5 billion funding round aimed at keeping pace with rivals, including OpenAI in the capital-intensive AI race. Musk, Tesla and xAI have not responded to Reuters requests for comment. The billionaire's companies already share close ties. XAI's Grok chatbot is rolling out to the automaker's vehicles, and Tesla engineers assisted Musk after his 2022 buyout of Twitter, the social media platform now known as X. Responding to a user post on X asking Tesla investors if they supported a merger between the two companies, Musk on Monday replied "No." He had said on Sunday he would ask Tesla shareholders to vote on whether the automaker can invest in xAI. "If it was up to me, Tesla would have invested in xAI long ago," Musk had said on X, having previously signaled that close ties between the companies could help advance Tesla's autonomous-driving ambitions. Integrating technology, talent and financial backing is a theme that runs across Musk's empire of companies. Earlier this year, xAI acquired Musk's X in a $33 billion deal that valued the combined group at $80 billion at the time. That deal meant the X platform would come in handy to further distribute xAI products, while also providing a real-time feed of users' posts, screenshots and massive amounts of other data. Investments into xAI would help Grok better compete with OpenAI's ChatGPT by increasing capital toward research and development. xAI recently launched Grok 4, its latest flagship AI model. While Musk has touted it as "the smartest AI in the world," Grok still lags ChatGPT in terms of usage. Tesla had last week said it was planning to hold its annual shareholder meeting on November 6, setting the date a day after a group of 27 investors pushed for it, citing legal obligations. (Reporting by Deborah Sophia and Gnaneshwar Rajan in Bengaluru; Editing by Mrigank Dhaniwala and Arun Koyyur)