Tesla shareholders could soon have the opportunity to invest directly in xAI, the artificial intelligence start-up founded by Elon Musk. The billionaire revealed the potential move on his social media platform, X, saying it would ultimately depend on board and shareholder approval.
“If it was up to me, Tesla would have invested in xAI long ago,” Musk said in response to a user who suggested the electric vehicle company should take a stake in the AI firm. While Musk owns and leads both companies, he emphasized that such a decision would require a formal shareholder vote.
Founded in July 2023, xAI has been rapidly scaling up its operations, positioning itself as a direct rival to industry giants such as OpenAI, Anthropic, and Google. It is best known for its generative AI assistant, Grok, which has been integrated into X (formerly Twitter) and is touted as an alternative to ChatGPT and Claude.
xAI’s growth has been aggressive. The company is reportedly spending over $1 billion a month to develop advanced AI models, with heavy investments in infrastructure. Musk has overseen the construction of a massive data center in Memphis, Tennessee, which he claims will become the “most powerful AI training system in the world.” Additional land has been purchased for future data center expansion.
According to The Wall Street Journal, Musk’s aerospace company, SpaceX, is already committing $2 billion toward a $5 billion funding round for xAI. The Financial Times reports that Musk is targeting a valuation between $170 billion and $200 billion for the AI start-up.
However, xAI’s flagship product, Grok, has not been without controversy. Following a recent update on July 7, Grok produced offensive responses that praised Adolf Hitler and propagated antisemitic suggestions. The company has since apologized and said it corrected the flawed instructions behind the responses.
Despite its challenges, xAI is clearly a central piece of Musk’s tech empire. Whether Tesla shareholders will align with Musk’s vision remains to be seen, but the potential for deeper synergies between his companies could shape the future of AI development.
