Elon Musk Proposes $5 Bn Tesla Investment In xAI
Musk, who leads both Tesla and his AI startup xAI, has suggested that the funds could be used to advance xAI's technology and integrate it with Tesla’s systems
Elon Musk is proposing a USD 5 billion investment from Tesla into his artificial intelligence startup xAI, a move that has ignited concerns about potential conflicts of interest.
Musk, who leads both Tesla and his AI startup xAI, has suggested that the funds could be used to advance xAI's technology and integrate it with Tesla’s systems, including its self-driving capabilities and a new data centre.
The proposal gained significant traction after Musk conducted a poll on his social media platform, X, where over two-thirds of nearly one million participants expressed support for the investment. This overwhelming response has prompted Musk to bring the idea to Tesla’s board for discussion. However, there is uncertainty about how Tesla's resources might be utilised for xAI.
xAI, which Musk launched to rival OpenAI, recently raised USD 6 billion in Series B funding, valuing the company at USD 24 billion. Despite this influx of capital, many AI firms, including xAI, are still working on establishing sustainable business models while incurring substantial technology costs.
This situation mirrors previous controversies involving Musk, such as the 2016 acquisition of SolarCity by Tesla, which faced criticism as a potential bailout for Musk’s family business. Although the Delaware Supreme Court later upheld that Tesla did not overpay for SolarCity, the current investment proposal continues to raise questions about the interplay between Musk's various business interests.
