Tesla’s Board of Directors will continue to consider potential investments in xAI.
At Thursday’s shareholder meeting, where investors approved a proposed $1 trillion payout for CEO Elon Musk, more shareholders voted against than in favor of investing in xAI, but a majority abstained.
“This is an advisory vote, so the board will consider next steps in light of this level of shareholder support,” Tesla General Counsel Brandon Ehrhart said in announcing the vote.
Musk previously told X that if it were his decision alone, Tesla “would have invested in xAI a long time ago.”
If an investment is made, the exact amount will ultimately be determined by the board of directors.
Founded in July 2023, xAI quickly became one of Musk’s most valuable companies, developing the Grok chatbot integrated into X and raising more than $12 billion to reach a $50 billion valuation in 2024.
It’s not the first time one of Musk’s many companies has invested in another. Musk announced in March that xAI had acquired X in an all-stock deal, valuing the companies at $80 billion and $33 billion, respectively.
Earlier this year, SpaceX also announced it would invest $2 billion in xAI. The web of growth of venture companies led by Musk, including Tesla, SpaceX, Neuralink, The Boring Company, and xAI, is known as the “Musknomy.”
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Some shareholders see this interconnectedness as a strength.
“Tesla has always been an AI company revolutionizing transportation, energy, and robotics through FSD and Optimus,” Tesla investor Stephen Hawk, who submitted an investment proposal for xAI, told the audience. “Rather than outsourcing our destiny, let us own it and maintain power, control, and security.”
Musk’s investments on behalf of Tesla have previously drawn scrutiny for potential conflicts of interest.
In 2016, Tesla acquired a stake in SolarCity for $2.6 billion. As a result, the company, which was founded by Musk’s cousin and was mired in a debt crisis in 2015, led to lawsuits from shareholders alleging misappropriation of funds. At the time, Musk was SolarCity’s chairman and largest shareholder.
A judge ultimately ruled in Musk’s favor, but SolarCity’s integration with Tesla Energy has been rocky, and the company won’t turn a profit until 2021.
