Elon Musk to Propose $5 Billion Tesla Investment in AI Startup xAI

Elon Musk wants $5 billion from Tesla for xAI

Musk, the world's richest person, launched xAI last year in a bid to compete with Microsoft-backed OpenAI. That sparked concerns he may allocate some resources of the automaker to the AI company. Many Musk fans have supported the idea: On Tuesday, Musk launched a poll asking users on social media platform X whether Tesla should invest $5 billion in xAI. More than two-thirds of nearly 1 million respondents voted in favor. It is not clear how many are Tesla investors. The poll came shortly after Tesla said its second-quarter automotive gross margin and profit fell short of Wall Street estimates on Tuesday as the company cut prices and offered incentives to boost sales.

Elon Musk to discuss $5 billion xAI investment with Tesla board

Musk, the world's richest person, launched xAI last year in a bid to compete with Microsoft-backed OpenAI. That sparked concerns he may allocate some resources of the automaker to the AI company. Many Musk fans have supported the idea: On Tuesday, Musk launched a poll asking users on social media platform X whether Tesla should invest $5 billion in xAI. More than two-thirds of nearly 1 million respondents voted in favor. It is not clear how many are Tesla investors. The poll came shortly after Tesla said its second-quarter automotive gross margin and profit fell short of Wall Street estimates on Tuesday as the company cut prices and offered incentives to boost sales. "Looks like the public is in favor. Will discuss with Tesla board," Musk said in a post on X on Thursday. During Tesla's earning conference call on Tuesday, Musk said xAI would be "helpful in advancing full self-driving and in building up the new Tesla data center," adding that there are opportunities to integrate xAI's chatbot, Grok, with Tesla's software. Despite a frenzy of investment, most AI firms are still working out business models while spending heavily on technology. "It's hard to make a claim that this is in the best interest of their Tesla shareholder," said Brent Goldfarb, a business school professor at the University of Maryland, who said it amounted to a transfer of Tesla wealth. "In AI in general, nobody is quite sure where the money is going to be made and who is going to pay for it. AI right now has all the signs of a bubble," he said. In 2018, Musk left OpenAI, which he co-founded because of a potential future conflict with Tesla, which is developing AI software for self-driving vehicles. Musk said in April that xAI is hiring some engineers from Tesla to retain talent in the face of recruiting by Open AI. Musk's xAI raised $6 billion in a series B funding in May, fetching a post-money valuation of $24 billion. Its investors include Andreessen Horowitz and Sequoia Capital. Musk has previously said he plans for a quarter of xAI to be owned by investors in X, which he bought for $44 billion. The social media firm's value has plunged since then. Musk previously has faced criticism over potential conflicts of interest among the many companies he owns and runs. Some Tesla shareholders alleged the 2016, $2.6 billion acquisition of struggling rooftop solar company, SolarCity, founded by Musk and his cousins, amounted to a bailout. Last year, however, the Delaware Supreme Court upheld a ruling that Musk did not push the electric carmaker to overpay for SolarCity.

Musk to discuss $5bln xAI investment with Tesla board

Tesla CEO Elon Musk said on Thursday he and the board of the electric vehicle company will discuss making a $5 billion investment in his artificial intelligence startup xAI, fueling concerns about a conflict of interest. Musk, the world's richest person, launched xAI last year in a bid to compete with Microsoft-backed OpenAI. That sparked concerns he may allocate some resources of the automaker to the AI company. Many Musk fans have supported the idea: On Tuesday, Musk launched a poll asking users on social media platform X whether Tesla should invest $5 billion in xAI. More than two-thirds of nearly 1 million respondents voted in favor. It is not clear how many are Tesla investors. The poll came shortly after Tesla said its second-quarter automotive gross margin and profit fell short of Wall Street estimates on Tuesday as the company cut prices and offered incentives to boost sales. "Looks like the public is in favor. Will discuss with Tesla board," Musk said in a post on X on Thursday. During Tesla's earning conference call on Tuesday, Musk said xAI would be "helpful in advancing full self-driving and in building up the new Tesla data center," adding that there are opportunities to integrate xAI's chatbot, Grok, with Tesla's software. Despite a frenzy of investment, most AI firms are still working out business models while spending heavily on technology. "It's hard to make a claim that this is in the best interest of their Tesla shareholder," said Brent Goldfarb, a business school professor at the University of Maryland, who said it amounted to a transfer of Tesla wealth. "In AI in general, nobody is quite sure where the money is going to be made and who is going to pay for it. AI right now has all the signs of a bubble," he said. In 2018, Musk left OpenAI, which he co-founded because of a potential future conflict with Tesla, which is developing AI software for self-driving vehicles. Musk said in April that xAI is hiring some engineers from Tesla to retain talent in the face of recruiting by Open AI. Musk's xAI raised $6 billion in a series B funding in May, fetching a post-money valuation of $24 billion. Its investors include Andreessen Horowitz and Sequoia Capital. Musk has previously said he plans for a quarter of xAI to be owned by investors in X, which he bought for $44 billion. The social media firm's value has plunged since then. Musk previously has faced criticism over potential conflicts of interest among the many companies he owns and runs. Some Tesla shareholders alleged the 2016, $2.6 billion acquisition of struggling rooftop solar company, SolarCity, founded by Musk and his cousins, amounted to a bailout. Last year, however, the Delaware Supreme Court upheld a ruling that Musk did not push the electric carmaker to overpay for SolarCity. (Reporting by Hyunjoo Jin in San Francisco and Akash Sriram in Bengaluru, Additional reporting by Paul Katie in New York; Editing by Shinjini Ganguli, Peter Henderson and Daniel Wallis)

Musk to discuss $5 billion xAI investment with Tesla board

Musk said in April that xAI is hiring some engineers from Tesla to retain talent in the face of recruiting by Open AI Tesla CEO Elon Musk said on Thursday he and the board of the electric vehicle company will discuss making a $5 billion investment in his artificial intelligence startup xAI, fueling concerns about a conflict of interest. Musk, the world's richest person, launched xAI last year in a bid to compete with Microsoft-backed OpenAI. That sparked concerns he may allocate some resources of the automaker to the AI company. Many Musk fans have supported the idea: On Tuesday, Musk launched a poll asking users on social media platform X whether Tesla should invest $5 billion in xAI. More than two-thirds of nearly 1 million respondents voted in favor. It is not clear how many are Tesla investors. The poll came shortly after Tesla said its second-quarter automotive gross margin and profit fell short of Wall Street estimates on Tuesday as the company cut prices and offered incentives to boost sales. (For top technology news of the day, subscribe to our tech newsletter Today's Cache) "Looks like the public is in favor. Will discuss with Tesla board," Musk said in a post on X on Thursday. During Tesla's earning conference call on Tuesday, Musk said xAI would be "helpful in advancing full self-driving and in building up the new Tesla data center," adding that there are opportunities to integrate xAI's chatbot, Grok, with Tesla's software. Elon Musk plans xAI supercomputer: Report Despite a frenzy of investment, most AI firms are still working out business models while spending heavily on technology. "It's hard to make a claim that this is in the best interest of their Tesla shareholder," said Brent Goldfarb, a business school professor at the University of Maryland, who said it amounted to a transfer of Tesla wealth. "In AI in general, nobody is quite sure where the money is going to be made and who is going to pay for it. AI right now has all the signs of a bubble," he said. In 2018, Musk left OpenAI, which he co-founded because of a potential future conflict with Tesla, which is developing AI software for self-driving vehicles. Musk said in April that xAI is hiring some engineers from Tesla to retain talent in the face of recruiting by Open AI. Musk's xAI raised $6 billion in a series B funding in May, fetching a post-money valuation of $24 billion. Its investors include Andreessen Horowitz and Sequoia Capital. Musk has previously said he plans for a quarter of xAI to be owned by investors in X, which he bought for $44 billion. The social media firm's value has plunged since then. Musk previously has faced criticism over potential conflicts of interest among the many companies he owns and runs. Some Tesla shareholders alleged the 2016, $2.6 billion acquisition of struggling rooftop solar company, SolarCity, founded by Musk and his cousins, amounted to a bailout. Last year, however, the Delaware Supreme Court upheld a ruling that Musk did not push the electric carmaker to overpay for SolarCity. Read Comments

Elon Musk Keen to Discuss $5 Billion Investment In xAI with Tesla Board

Tesla CEO Elon Musk said on Thursday he will discuss a $5 billion investment in artificial intelligence startup xAI, as the electricvehicle maker looks to double down on efforts to expedite the development of its robotaxi and selfdriving products. (Reuters) - Tesla CEO Elon Musk said on Thursday he will discuss a $5 billion investment in artificial intelligence startup xAI, as the electric-vehicle maker looks to double down on efforts to expedite the development of its robotaxi and self-driving products. The ambitious self-driving project has faced numerous technical and legal hurdles in recent years, and the automaker is now bolstering its AI infrastructure to train models for Tesla's autonomous technology. "Looks like the public is in favor. Will discuss with Tesla board," Musk said in a post on X after a poll on the social media platform showed nearly 68% of respondents said the company should invest in xAI, the Grok chatbot developer. Earlier this week, during Tesla's earnings conference call, Musk said xAI would be "helpful in advancing full self-driving and in building up the new Tesla data center," adding that there are opportunities to integrate Grok with Tesla's software. Tesla's second-quarter automotive gross margin and profit fell short of Wall Street estimates on Tuesday as the company cut prices and offered incentives to boost sales. Musk, the world's richest person, launched xAI last year, in a bid to compete with ChatGPT maker OpenAI, its backer Microsoft and Alphabet's Google. The startup raised $6 billion in a series B funding in May, fetching a post-money valuation of $24 billion. Its investors include Andreessen Horowitz and Sequoia Capital.

Tesla Gains as Musk Eyes $5B xAI Investment: Time to Buy the Stock? | Investing.com UK

Elon Musk plans to discuss a $5 billion investment in his AI startup xAI with Tesla (NASDAQ:TSLA)'s board after a poll on X. According to reports, Tesla's CEO Elon Musk is set to discuss a potential $5 billion investment in his artificial intelligence startup xAI with the Tesla board. This move comes as Tesla aims to accelerate the development of its robotaxi and self-driving technologies. The proposed investment follows a poll on X (formerly Twitter), where 68% of respondents favored the idea. xAI, launched by Musk in 2023, recently raised $6 billion in Series B funding, valuing the company at $24 billion post-money. The proposed investment in xAI is expected to bolster Tesla's AI infrastructure for training autonomous technology models and advance its full self-driving capabilities. By integrating xAI's Grok chatbot with Tesla's software, the company aims to enhance its autonomous driving technology and potentially accelerate the development of robotaxis. This can significantly improve Tesla's AI capabilities and infrastructure, potentially leading to faster progress in self-driving technology. However, the $5 billion investment represents a substantial financial commitment for Tesla, which could affect the company's profit margins in the short term. This comes when Tesla's Q2 automotive gross margin and profit fell short of estimates, leading the company to cut prices and offer incentives to boost sales. As of 12:26 PM EDT on July 25, 2024, Tesla's stock (TSLA) was trading at $223.90, up 3.66% for the day. The company's market capitalization stood at $715.917 billion, with a trailing P/E ratio of 60.53 and earnings per share of $3.56. Tesla's stock has shown mixed performance, with a year-to-date return of -9.81%, underperforming the S&P 500's 14.85% gain. However, its 5-year return of 1,169.06% significantly outpaces the S&P 500's 81.42% over the same period. Key financial metrics for Tesla include a profit margin of 13.00%, a return on equity of 20.86%, and a total cash of $30.72 billion. The company's debt-to-equity ratio stands at 18.61%. Investors will be closely watching Tesla's upcoming earnings report, expected between October 18-22, 2024, for further insights into the company's financial health and the potential impact of the proposed xAI investment. *** Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.