Tesla CEO Elon Musk recently posted a poll on social media platform X, asking whether the publicly traded automaker should invest $5 billion into his latest startup, xAI. This informal poll was aimed at testing the waters and gauging public opinion on this potential investment. Musk emphasized that board approval and shareholder votes would be needed for such a decision to be made.
The poll was shared shortly after Tesla’s second-quarter earnings call, which fell short of analysts’ expectations for the fourth consecutive quarter. As a result, the company’s core automotive segment experienced a decline in revenue. Despite this setback, Tesla saw a significant increase in energy storage sales, capturing investors’ attention with its ambitious plans for robotaxis and humanoid robots currently in development. However, Tesla’s stock price dropped by over 7% in after-hours trading following the earnings report.
During the earnings call, Musk discussed the potential for Tesla to invest in xAI and integrate its software, Grok, into Tesla vehicles. He highlighted the valuable insights Tesla has gained from xAI, particularly in enhancing Full Self-Driving capabilities and establishing a new data center for the company. While expressing his support for investing in xAI, Musk acknowledged the need for shareholder approval before proceeding with such a significant investment.
xAI, established in March of last year and publicly introduced by Musk in July 2023, focuses on developing large language models and AI software products to rival industry leaders such as Google, Microsoft, OpenAI, Meta, and others. Grok, xAI’s flagship product, offers various applications such as generating story ideas, transcripts, action items from meetings, code creation or editing, and language translation services. Despite its innovative features, Grok currently lags behind established chatbots like ChatGPT, Bard, Bing, and Claude in terms of functionality.
xAI’s recent fundraising success, with a $6 billion series B funding round and a post-money valuation of $24 billion, underscores the market’s confidence in the startup’s potential. Musk’s endorsement of Grok as a quirky and unconventional chatbot alternative indicates his vision for xAI’s unique positioning in the AI landscape. While Musk’s various companies occasionally collaborate and support each other, the proposed $5 billion investment in xAI would represent a significant financial commitment compared to their previous engagements.
Elon Musk’s interest in potentially investing $5 billion in xAI demonstrates his ongoing pursuit of innovative technologies and solutions across his diverse business ventures. The outcome of the informal poll and subsequent shareholder discussions will likely shape the future trajectory of xAI and its integration into Tesla’s products and services. As Musk continues to push the boundaries of technology and AI advancements, the collaboration between Tesla and xAI holds the promise of delivering groundbreaking developments in the automotive and artificial intelligence sectors.