Tesla Inc. will ask shareholders to approve a potential investment in xAI, a startup founded by Elon Musk.

Musk made the announcement on X, previously known as Twitter, in response to speculation regarding funding.

This announcement follows a report from The Wall Street Journal saying that SpaceX, another company led by Musk, may invest US$2 billion in xAI.

Musk noted that the final decision for Tesla’s investment will depend on the company’s shareholders and board.

xAI was launched by Musk in early 2023 and merged with the social media platform X in a deal that valued the AI startup at US$80 billion and X at US$33 billion.

The new entity, XAI Holdings, is reportedly considering a funding round that could increase its valuation to US$200 billion.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Musk’s decade-long dual approach to AI investments

Elon Musk’s push for Tesla to invest in xAI continues his long-established pattern of advancing and monitoring AI development.

As early as 2014, Musk invested in DeepMind and other AI firms not primarily for financial returns but to monitor AI development due to concerns about potential risks1.

This strategy of promoting AI advancement while warning about its dangers has been consistent for over a decade, with Musk explicitly stating his investments were motivated by concerns about “dangerous outcomes” from unchecked AI development1.

The xAI-Tesla relationship reflects this approach, with Musk positioning Tesla to benefit commercially from AI ($198.3 million in business between the companies last year) while maintaining influence over AI’s development trajectory.

His founding of OpenAI in 2015 (before later departing) and now xAI in 2023 highlights his pattern of creating organizations that can influence AI’s direction while integrating them with his other companies.

2️⃣ Corporate synergies across Musk’s empire follow established playbook

The potential Tesla investment in xAI extends Musk’s consistent strategy of creating beneficial relationships between his companies, a pattern evident throughout his career.