Elon Musk Proposes Tesla Investment in xAI, Raising Concerns and Controversy

Musk Offers Tesla a Dubious Deal (Again)

Tesla Inc.'s investors, perhaps a little troubled by the electric vehicle maker's sagging sales and profits, are to be offered a bonus: A chance to own a slice of the model that recently called itself "MechaHitler". That is but one of the dubious benefits of Elon Musk's plan to have Tesla investors vote on the company investing in his artificial intelligence firm, xAI Holdings. xAI made headlines for all the wrong reasons last week when its chatbot, Grok, ran amok with antisemitic replies to queries, followed swiftly by the resignation of Linda Yaccarino, chief executive of X, Musk's social media platform that was rolled into xAI earlier this year. If all that doesn't sound like the best time to pitch Tesla investors on buying in, you maybe weren't around for the SolarCity deal in 2016.

Elon Musk Turns to Tesla Shareholders to Fuel His AI Ambitions

The money behind Elon Musk's trillion-dollar empire is increasingly flowing in one direction: toward artificial intelligence. The billionaire on Sunday said he plans to hold a vote by Tesla Inc. shareholders on whether the EV maker should invest in xAI, the cash-burning artificial intelligence startup he founded two years ago. Musk said he didn't support a merger of the companies but wanted Tesla investors to get exposure to the growth at xAI, which was valued at $113 billion after being folded into his social media platform, X, in an all-stock deal in March. Bloomberg's Craig Trudell reports. (Source: Bloomberg)

Elon Musk never liked Tesla being a car company, anyway

Why it matters: Musk is proposing that Tesla help back xAI, which owns the social media platform X and the ChatGPT competitor Grok. * Tesla investors will need to approve the deal in a shareholder vote, he said Sunday on X: "It's not up to me. If it was up to me, Tesla would have invested in xAI long ago." State of play: The world's richest person has always described Tesla as a tech company with expertise in autonomy and robotics -- not an automaker. * Investors have largely agreed, putting the stock in a special elevated class apart from its automotive contemporaries. The intrigue: Musk's endorsement of a Tesla investment in xAI comes days after high-profile Tesla bull and Wedbush Securities analyst Dan Ives floated the possibility of a merger between Tesla and xAI. * "Adding Tesla's data to xAI would create a formidable AI play ... a frontrunner when it comes to AI and not launching from the backseat," Ives said. "There obviously are some concerns, but the benefits far outweigh the risks." * Musk retorted: "Shut up, Dan." * An investment would bring them closer together, though, without the regulatory hassles of a merger. By the numbers: xAI is expected to burn about $13 billion in 2025 as it invests heavily in Grok, effectively necessitating the pursuit of outside partners, Bloomberg reported. * The company is pursuing a valuation of up to $200 billion in its next fundraising round, FT and Reuters reported. Between the lines: Tesla is not exactly a fountain of cash on its own. * The company's vehicle sales have been plunging in 2025 amid a backlash to Musk's association with President Trump -- but if he's concerned about the drop-off, he's not showing it. * As WSJ noted earlier this month, Musk "has already moved beyond caring about cars." * He's stated repeatedly that the company's future is predicated on autonomy -- with all the value in the AI capability and none in actual car production. Reality check: You can't have self-driving cars without the car part. What's next: Tesla set its annual meeting in November, where investors will presumably vote on a possible xAI investment.

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 Is Crumbling, But Elon's Trying to Force It to Bail Out His Unholy Merger of Twitter and xAI

Tesla CEO Elon Musk announced over the weekend that shareholders of his EV maker Tesla will vote on whether to invest in his own artificial intelligence firm xAI. In other words, the mercurial billionaire is orchestrating a potentially massive shift in funds to prop up his cash-burning -- and gas-burning -- AI startup, the flagship product of which is the troubled chatbot Grok. In March, Musk merged xAI with his social media platform X, which had previously seen an advertiser exodus triggered by his embrace of far-right extremism and disregard for content moderation. Behind the scenes, it's unlikely that either arm of the company -- social media or AI -- is making very much money in the grand scheme of things. Enter Musk's plan: siphon money from one business to another. And it's not just Tesla, either. On Saturday, the Wall Street Journal reported that Musk was pumping $2 billion from his space company SpaceX into xAI, almost half of the startup's recent equity raise. Since Tesla is a publicly-traded company, though, Musk will need to convince his shareholders to support the bailout. "It's not up to me," Musk tweeted on Sunday. "If it was up to me, Tesla would have invested in xAI long ago." It's exactly the kind of move we'd expect Musk to make, redistributing funds between the many businesses that he sometimes runs more like an empire than independent entities that make their own decisions. But it's also a risky gambit that couldn't have come at a worse time. Tesla is in a precarious position itself right now, with revenues cratering due to plunging sales, largely the result of Musk's own actions and an influx of compelling competition. However, despite Tesla's dire predicament, investors are still propping up a near-$1 trillion valuation. If he can convince them to pour all that extra cash into xAI, it'll be a risky bet. Musk has been unabashed in his boasting about the company's Grok chatbot, arguing that it's the "smartest AI in the world." However, mere hours before those remarks, Grok started spewing mind-bogglingly racist and antisemitic talking points and even referred to itself as "MechaHitler." A peek at its underlying instructions also revealed that Grok is programmed to mirror Musk's views to the point where it will do a web search about his stance before generating an answer. Put simply, it's the most literal evidence of his social media platform being an echo chamber we've seen to date. Musk's investors have already had to put up with a lot, to say the least, with Musk massively tarnishing the EV maker's brand, resulting in massive holes in the company's finances. The billionaire's pet project, the Cybertruck, has been an unmitigated disaster. Tesla's long-awaited launch of an autonomous taxi service has also left plenty to be desired. As is the case with countless other companies in the industry, xAI's multi-billion-dollar valuation vastly outpaces its meager revenue. xAI is currently bleeding a whopping $1 billion per month as costs continue to rise. And with xAI not even remotely close to turning a profit, and X struggling with its own financial woes, Musk is now looking to his ailing EV maker to prop up his Nazi chatbot. Is Musk building up an enormous pyramid scheme, siphoning funds from one business to the other to gloss over some fundamental money problems -- or is he simply trying to buy xAI some time before he can leverage it into an industry giant? Tesla investors have a track record of embracing their controversial CEO wholeheartedly, even in the face of dismal headwinds. In other words, it wouldn't be surprising to back Musk yet again -- and if they do, we'll be watching closely to see what unfolds.

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.

Musk will ask Tesla shareholders to vote on bailout for twitter/xAI

Tesla shareholders will vote on whether to invest into xAI, Tesla CEO Elon Musk's private company, according to a post by Musk on twitter today. Elon Musk is not just the CEO of Tesla, the electric car company that you may have heard about from time to time in Electrek's coverage, but several other companies as well. And, famously, Musk companies often share resources - there has been much talk of incorporating SpaceX technology into Tesla vehicles, and putting xAI/twitter's "MechaHitler".... er, I mean, "Grok".... feature into Tesla cars, among other collaborations that have happened over his various companies' histories. And today, Musk made it official that he will seek greater collaboration between three of his companies: Tesla, xAI, and twitter, in the form of an investment into xAI by Tesla. The situation is a little more complicated than that, though. Tesla is a public company, owned by shareholders. Musk is the largest shareholder, but only owns around 12% of the company himself. This is a different situation than xAI, which is a private company, owned by Musk. While there are other investors, he can exercise much more direct control over the company, and doesn't have to put big decisions up to a vote. One of the recent decisions he made with xAI was to purchase twitter in March. You may say, "wait, I thought he bought twitter back in 2022?," and you'd be correct. Musk purchased twitter for $44 billion in 2022, which was widely agreed to be far too high a price, and then rapidly saw the company's valuation drop to around $10 billion. Then, in March 2025, Musk had xAI purchase twitter in an all-stock deal, valuing twitter company at $45 billion - again, far too high of a valuation, but considering he purchased the company from himself, he could set the price at whatever he wanted. The move was widely considered to be a bailout of twitter, and the numbers involved considered arbitrary, perhaps partially to help save face for Musk after he made one of the worst business deals of all time. Now the two are the same entity, and it seems clear that he would like to bring Tesla into the fold, in some way or another. Musk has already improperly used resources from Tesla, a public company, to boost xAI and twitter, his private companies. Last year, he gave up Tesla's priority position for highly sought-after NVIDIA H100 GPUs, instead shipping those GPUs to xAI and twitter. Tesla could have used these GPUs for training its FSD/Robotaxi systems, which Musk has claimed is the most important thing to Tesla's future, but instead graciously sent them to his other company that used them to, uh, train a bot to say Nazi stuff apparently. xAI has also poached talent from Tesla, multiple times, showing how Musk is using Tesla as a farm team for his private company. So it hasn't been a secret that Musk would like to use public money to bail out his private companies, as he's been setting the stage for for a while now. Musk has previously "discussed" getting Tesla to invest in xAI in the past, but the idea was never made official until today, when Musk said that he will put the idea to a shareholder vote. In response to one of his superfans asking for the the opportunity to waste money on an overvalued social media app (which would mark the third time it has been overpaid for in as many years), and the backend fueling "MechaHitler," Musk said this: Tesla traditionally holds its annual shareholder meeting around the middle of the year, so if it were a normal year, this shareholder vote might be imminent. But it's not a normal year, as just last week Tesla announced an exceptionally late shareholder meeting, pushing it back to November, the latest it has ever held the meeting. This means that Musk will have around four months to campaign for this idea - something that he'll perhaps have more time to do, now that he's no longer cosplaying as a government official. And we may have a hint as to how that vote will go, because the last time Musk campaigned for a clearly terrible idea, Tesla shareholders ate it up. In mid-2024, Musk ended his yearslong absenteeism at Tesla in a flurry of activity, hoping to persuade enough shareholders to vote for his illegal $55B pay package. That flurry involved firing 10% of the company (supposedly in order to save money - though Tesla's earnings have dropped drastically since), including important leadership and successful teams, which caused chaos with Tesla's projects. He also pushed back an all-important affordable car project (which we've still heard nothing about) and held Tesla's AI projects hostage while shifting both resources and staff from Tesla to his private AI company, even as he claims that AI is the future of Tesla. In the end, these bad decisions worked, and shareholders voted to give their bad CEO his $55B pay package, even though it was later ruled to still be illegal. So it looks like we've got another campaign coming up, and if last time was any indication, expect some really bad decisions along the way. It worked last time, didn't it? Republicans recently killed a number of home energy efficiency credits, including the rooftop solar credit. That means you only have until the end of this year to upgrade your home before republicans raise the cost of doing so by an average of ~$10,000. So if you want to go solar, get started TODAY, because these things take time and the system needs to be active before you file for the credit. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it's free to use, and you won't get sales calls until you select an installer and share your phone number with them.

Musk says he does not support Tesla, xAI merger

Tesla CEO Elon Musk said Monday that he does not support merging his electric vehicle company with his artificial intelligence (AI) firm, xAI, after the idea was floated last week by a prominent analyst. In response to a user on his social platform X who asked Tesla investors whether they backed a merger, the tech billionaire wrote "No." He had previously seemed resistant to the idea pitched by Wedbush Securities analyst Dan Ives, who suggested last week that the Tesla board could position the EV maker for a potential merger with xAI by increasing Musk's voting share to 25 percent. This came as part of a broader proposal, which also suggested that the board create an incentive-driven pay package for Musk, laying out expectations about the amount of time he needs to spend at the company and setting up a special committee to establish rules for his political endeavors. Ives, who is a well-known Tesla bull, called on the board to act after Musk announced the launch of his third party called the America Party. The tech mogul quickly hit back at Ives, writing in an X post, "Shut up, Dan." Musk's decision to return to politics caused Tesla's stock to tumble last week. The EV maker has had a tumultuous year so far, largely as a result of its CEO's political involvement. His role leading President Trump's Department of Government Efficiency weighed heavily on Tesla, which became a political symbol for Musk and his controversial cost-cutting effort. Musk's decision to step away from the administration offered a brief reprieve for investors. However, he soon began publicly feuding with the president over his sweeping tax and spending bill. While Musk was resistant to the idea of a merger, he does appear keen on having Tesla invest in xAI. He suggested Sunday that Tesla will hold a shareholder vote on the matter, writing on X, "If it was up to me, Tesla would have invested in xAI long ago." It comes as part of a broader push to boost his AI company. His aerospace company SpaceX has agreed to invest $2 billion in xAI, according to The Wall Street Journal. Musk also merged X and xAI in March.

Musk Suggests Tesla Investor Vote on xAI Investment, Rules Out Merger

Musk's comments followed a Wall Street Journal report on Saturday that SpaceX will invest $2 billion in xAI. 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 in the capital-intensive AI race. Musk, Tesla and xAI did not respond 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. D.A. Davidson analyst Gil Luria said Tesla already has access to xAI's advanced models but could benefit from the startup's rising value if it becomes a winner in AI. 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 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 will require tens of billions of dollars of investment in order to continue on its current path... With a board that has been very supportive of Mr. Musk in the past, we would expect that Tesla capital to be available to xAI," Luria said. xAI recently launched Grok 4, its latest flagship AI model. While Musk has touted it as "the smartest AI in the world," Grok usage still lags ChatGPT. Tesla had last week said it would hold its annual shareholder meeting on November 6. Reporting by Deborah Sophia and Gnaneshwar Rajan in Bengaluru; editing by Mrigank Dhaniwala and Arun Koyyur. The final deadline for the 2025 Inc. Power Partner Awards is Friday, July 25, at 11:59 p.m. PT. Apply now.

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.

Elon Musk Says There's No Tesla-xAI Merger Coming, But He's Open to an 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 in early 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 nearly 1% in afternoon 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: Elon Musk's xAI Vote Could Rewrite EV Maker's DNA - Tesla (NASDAQ:TSLA)

Tesla Inc TSLA is once again at a crossroads -- and this time, it's not about Cybertrucks, Full Self-Driving, or new gigafactories. On Monday, Elon Musk announced that Tesla shareholders will vote on a potential investment in his AI venture, xAI. The proposal has Wall Street asking a pointed question: Is Tesla an electric vehicle company, or is it morphing into an AI-fueled tech conglomerate? Read Also: Tesla Investment In xAI Hinges On Elon Musk Having 25% Voting Power: 'Level Is Key,' Says Dan Ives 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 StartedFrom EV King To AI Contender? The proposed xAI tie-up has triggered a fresh debate about Tesla's true purpose. A decade ago, it was all about disrupting the auto industry. But today, Musk's obsession with AI -- and a parallel focus on chatbot tech and neural interfaces -- threatens to blur Tesla's core identity. And it's a troublesome identity, to boot. Tesla shareholders are being asked to invest in a company that just issued an apology after its flagship Grok chatbot made violent and antisemitic posts, blaming a recent system update that caused the bot to reference extremist content from Musk's social media platform, X. The update was active for 16 hours and led Grok to praise Adolf Hitler and spread conspiracy theories. Musk froze Grok's public account last week and the startup claims that the code was removed and overhauled. But the episode highlights the broader risks of AI misuse and the problematic nature of Musk's views. While Tesla is no stranger to moonshots, an official capital stake in xAI could shift priorities, capital, and leadership bandwidth away from its EV mission. That's the identity crisis at play: investors bought into Tesla as a clean energy and transportation innovator. Now, they may decide to fund Musk's next AI crusade, possibly diluting the clarity and profitability of Tesla's core business. See Also: Musk's Grok AI Got Asked How Many Times Has HBO Changed Its Name, Leaves User Stunned With Racially Charged Response Shareholder Approval Or Confusion? Tesla's stock popped 1.2% pre-market on the news, a sign that some investors are still betting on the Musk magic. But others are warning of distraction risk. Musk's personal brand -- polarizing as it is -- already casts a long shadow over Tesla's boardroom. A formal marriage between Tesla and xAI would raise governance questions and blur lines between personal ambition and shareholder value. There's also the real possibility that xAI's ambitions could rewrite Tesla's DNA just as it did with X back in March: shifting the company's roadmap, draining capital into a non-core startup, and risking cultural confusion within Tesla's engineering ranks. This isn't just about AI integration -- it's about a possible evolution from hardware-heavy EVs to abstract, high-burn tech platforms. Read Next: No Plan B - Tesla's Musk Premium Is On Thin Ice Image: Shutterstock TSLATesla Inc$317.701.34%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

Elon Musk's 'Muskonomy' Strategy Could Take A 'Toll' On Tesla, Potentially Delaying Innovation, Warn Experts - NVIDIA (NASDAQ:NVDA), Tesla (NASDAQ:TSLA)

Elon Musk's strategy to leverage resources across his business empire, including Tesla Inc. TSLA, SpaceX, and xAI, has sparked investor concerns, particularly after a recent controversy involving chatbot Grok. What Happened: Musk is promoting a 'Muskonomy' strategy that would allow investors to invest in his various businesses, which include SpaceX, X, xAI, and The Boring Company, reported Business Insider. He has even promised to prioritize "longtime shareholders" if any of his companies go public. This strategy could potentially help Tesla meet its AI demands for autonomous driving by leveraging resources across Musk's other companies. Check out the current price of TSLA stock here. However, this strategy carries notable risks. For example, Grok's recent controversy over anti-Semitic content on X has raised alarms about incorporating the chatbot into Tesla's electric vehicles. Additionally, Musk's move last year to redirect a $500 million shipment of Nvidia NVDA chips -- originally meant for Tesla -- to X and xAI triggered concern among investors. Musk defended the move, saying it was beneficial for Tesla as the company lacked the infrastructure to utilize the chips at the time. Analyst Gadjo Sevilla from EMARKETER, expressed concern about Musk's strategy of "cannibalizing one business to prop up another one could take its toll." This could potentially delay innovation at Tesla, warned the analyst. Meanwhile, Garrett Nelson, senior VP and equity analyst at CFRA Research, pointed out that other companies usually conduct the interplay under "one corporate umbrella." However, with Musk, "the relationship and interplay between his private companies and a public company (Tesla)" is the key distinguishing factor. See Also: Bitcoin, XRP, Dogecoin Dip But Ethereum Outperforms After Inflation Report - Benzinga Why It Matters: Musk's 'Muskonomy' strategy comes at a crucial time for Tesla, which is currently facing an identity crisis. Musk recently announced that Tesla shareholders would vote on a potential investment in his AI venture, xAI, raising questions about whether Tesla is evolving into an AI-fueled tech conglomerate. 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 While veteran investor Gary Black suggested that a shareholder vote would be the fairest way to decide on a potential merger between Tesla and xAI, some are questioning Musk's plans to sell xAI. Musk has been vocal about his desire for Tesla to invest in xAI, but has left the final decision to the shareholders. Despite the potential risks, some analysts believe that xAI is worth the bet, as it could significantly benefit Tesla's AI ambitions. Benzinga's Edge Rankings place Tesla in the 50th percentile for quality and the 91st percentile for growth, reflecting mixed performance. Check the detailed report here. READ MORE: Elon Musk's Tesla Could Face Stricter Oversight As Trump's NHTSA Pick Targets Autonomous Driving: 'Cannot Sit Back' Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. NVDANVIDIA Corp$170.203.74%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum81.89Growth98.62QualityN/AValue6.52Price TrendShortMediumLongOverviewTSLATesla Inc$308.90-2.52%Market News and Data brought to you by Benzinga APIs

Elon Musk to hold Tesla investor vote on xAI investment, rules out...

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 in the capital-intensive AI race. Musk, Tesla and xAI did not respond 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. D.A. Davidson analyst Gil Luria said Tesla already has access to xAI's advanced models but could benefit from the startup's rising value if it becomes a winner in AI. 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 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 will require tens of billions of dollars of investment in order to continue on its current path... With a board that has been very supportive of Mr. Musk in the past, we would expect that Tesla capital to be available to xAI," Luria said. xAI recently launched Grok 4, its latest flagship AI model. While Musk has touted it as "the smartest AI in the world," Grok usage still lags ChatGPT.

Tesla to hold shareholder vote on whether to invest in xAI

Tesla will hold a shareholder vote on whether Elon Musk's carmaker should invest in his artificial intelligence startup xAI, the billionaire said Sunday. "If it was up to me, Tesla would have invested in xAI long ago," Musk said in a post on his social media platform X, which itself is a part of xAI. "We will have a shareholder vote on the matter." Musk has been pouring resources from his other companies into xAI as he seeks to compete with AI leaders like OpenAI, Meta and Google. In March, xAI acquired X, which it already used for training data and to distribute its chatbot, Grok. And on Saturday, the Wall Street Journal reported that Musk's space company, SpaceX, is set to invest $2 billion into xAI. Securing an investment for xAI from Tesla could be somewhat more complicated, given that it is a publicly traded company, and one whose investors have already been antsy about Musk's priorities in recent months. Tesla shareholders concerned with the scale of Musk's political involvement -- as well as his leadership role in at least three other companies -- have called for him to dedicate at least 40 hours per week to his role as Tesla CEO, or for the board to set "ground rules" around his outside activities. Musk previously pushed back on the idea that Tesla could merge with xAI. Shares of Tesla (TSLA) ticked up slightly early Monday but remain down more than 16% from the start of the year. Tesla said last week that it will hold its annual shareholder meeting on November 6 -- an announcement that came after dozens of angry shareholders demanded to know why it was taking so long to schedule the event. xAI has rapidly racked up significant investment, and not just from Musk's own companies. Last May, it raised $6 billion from investors including Sequoia Capital, Andreesen Horowitz, and Saudi Prince Alwaleed Bin Talal, boosting its valuation to $24 billion. When xAI bought X in March, Musk said the value of the combined company was $80 billion. More recently, xAI has sought to raise $10 billion at a valuation of $200 billion, Bloomberg has reported.

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)