Tesla eyes $5 billion xAI investment
xAI could enhance Tesla’s self-driving and data centre capabilities.
Elon Musk has launched a poll on social media platform X, asking if Tesla should invest $5 billion in his AI startup, xAI. Early votes show strong support, with 70% in favour. Musk emphasised that board approval and a shareholder vote are necessary before proceeding. This comes after Tesla reported its lowest profit margin in five years due to price cuts and increased AI project spending.
During Tesla’s earnings call, Musk highlighted xAI’s potential to enhance Tesla’s full self-driving capabilities and data centre infrastructure. He also mentioned opportunities for integrating xAI’s chatbot, Grok, with Tesla’s software. The poll, posted for nearly three hours, saw participation from approximately 386,000 users. Tesla and xAI have not yet commented on the poll results.
Musk launched xAI last year as an alternative to ChatGPT, securing $6 billion in series B funding and reaching a post-money valuation of $24 billion. Major backers include Andreessen Horowitz and Sequoia Capital. Musk plans for a quarter of xAI to be owned by investors in X, which he purchased for $44 billion.
On the earnings call, Musk dismissed concerns about diverting resources from Tesla to his other ventures. He previously ordered Nvidia to ship thousands of AI chips to xAI and X due to Tesla’s data centre being at full capacity. Musk has a history of using polls to gauge public opinion, including a 2021 poll on selling 10% of his Tesla stake.
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