Tesla CEO Elon Musk Declines Unilateral Decision on Personal AI Startup Investment, Plans Shareholder Vote in November
During Tesla's Q2 business results announcement, Elon Musk stated that he will not unilaterally decide whether the company should invest in xAI, the AI startup he founded. Instead, the decision will be handed over to Tesla shareholders through an official voting process. This move occurs against a backdrop of concerns about conflicts of interest and transparent governance while Musk manages multiple companies simultaneously.
When asked whether Tesla could fund or acquire shares in xAI, Musk definitively responded that "it's not my decision" and "shareholders can make any proposal they want". Tesla's Chief Financial Officer, Vaibhav Taneja, also indicated that this was not an appropriate forum to discuss the matter, suggesting leadership will leave the decision to shareholders through official procedures.
Tesla's next annual shareholder meeting is scheduled for November 6th, opening the possibility for shareholders to propose and vote on xAI investment. Musk did not confirm whether this proposal would be included in the agenda but affirmed that "a vote is inevitable". Previously, he had posted in support of this venture on the X platform he owns.
Complex Relationship Between Tesla and xAI
xAI was established by Musk in 2023 but has not yet achieved a significant breakthrough in the competitive AI market. Unlike competitors such as OpenAI, Anthropic, or Google DeepMind, xAI has not signed any major contracts with business clients and has not opened a platform for external developers. Its primary product is the Grok chatbot, designed to be sharp, humorously sarcastic, and according to Musk, more "honest" than ChatGPT.
Although considered a separate startup, xAI has an existing commercial collaboration with Tesla. The company uses Tesla Energy's Megapack products, while Tesla plans to integrate Grok into vehicle lines to provide AI services for drivers and passengers. Additionally, xAI has received support from other Musk-led companies, with Bloomberg reporting that SpaceX committed approximately $2 billion to xAI in June.
This is not the first time Tesla shareholders have been asked to vote on a controversial proposal initiated by Musk. In 2016, shareholders approved the $2.6 billion acquisition of SolarCity, a solar energy company founded by Musk's cousins who were experiencing difficulties. The deal faced criticism and litigation regarding conflicts of interest, but Musk maintained it was a long-term strategic decision.
Currently, with Musk simultaneously managing Tesla, SpaceX, xAI, X, Neuralink, and numerous other companies, concerns about overlapping interests and transparent governance have resurfaced. Critics argue that Tesla, as a public company with fiduciary responsibilities, must be cautious about investing in Musk's personal projects without demonstrating clear benefits.
If the investment proposal is included in the November meeting's agenda, the vote could open a new chapter in Tesla's AI strategy and tighten the connection with Musk's AI ambitions.
