Tesla is preparing to hold a shareholder vote to find out if the electric vehicle company should invest in the artificial intelligence startup of Elon Musk, in what would be a major financial link between two of its most important companies.
Musk revealed the plan in a series of X positions, responding to the concerns raised by Tesla’s retail investors who felt excluded from the growing ecosystem of companies related to the billionaire entrepreneur.
“It’s not mine. If it was me, Tesla would have invested in Xai a long time ago,” wrote Musk. “We will have a shareholder vote on the issue.”
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The vote, which confirmed Musk will take place without specifying a calendar, intervenes in an increasing interest on the part of the companies led by Musk to support the massive push of the XAI infrastructure. A few hours before his announcement, Musk confirmed that SpaceX, his aerospace company, is preparing to invest $ 2 billion in XAI. This investment is part of a wider $ 5 billion strategic equity cycle supported by global investors, which recently confirmed Morgan Stanley.
A new layer in muskomy
This current development is the latest example of Musk’s strategy to pollinate its empire – an informal network often called “Muskonomy”, which includes Tesla, Spacex, Neuralink, The Boring Company and Now Xai. According to a pitch pitch reported by Bloomberg, Xai explicitly marketed its links with other Musk companies as an investor sales argument. The idea is to take advantage of existing ecosystems, from computer capacity to distribution channels, between Musk companies.
In March, XAI acquired Musk X’s social media company (formerly Twitter) in an All-Stock agreement which appreciated Xai at 80 billion dollars and X at 33 billion dollars, by establishing more synergies through Musk’s business footprint.
Since its foundation in July 2023, XAI has quickly moved to ensure funding and infrastructure. At the end of 2024, the startup had collected more than $ 12 billion through the Tours of series A, B and C. Its last round – finished in June – combined $ 5 billion in equity and $ 5 billion in debt, according to Morgan Stanley. The funds are reserved for the expansion of the XAI data center infrastructure and the scaling of its Grok AI chatbot.
XAI plans to generate a billion dollars in gross income by the end of this year and projects $ 13 billion in annual profits by 2029, according to Bloomberg, citing financial disclosure.
The voting to be held among the shareholders of Tesla could open a new financing avenue for XAI, in particular at a time when the company would be in preliminary talks for a new financing cycle which could enhance it between $ 170 billion and 200 billion dollars, according to the Financial Times. This tour implies the public investment fund of Saudi Arabia (PIF), which already has an indirect participation in XAI through Kingdom Holdings Company, investing $ 800 million.
However, Musk publicly contradicted these claims. “XAI is not looking for funding for the moment. We have a lot of capital,” he wrote on X following the FT report.
Navigation of corporate limits
Musk’s suggestion that Tesla invests in XAI has aroused concerns about conflicts of interest. It is believed that the cross -investment between the entities led by Musc could blur the corporate governance lines, in particular with Musk as CEO of Tesla and Xai.
Addressing concerns, Musk said he does not support a merger between Tesla and Xai.
“It would be great [for Tesla to invest in xAI]But subject to the approval of the board and shareholders, “he wrote.
This distinction can aim to ensure investors and regulators that Tesla’s capital deployment decisions will follow standard governance procedures.
Tesla has planned its annual shareholder meeting for November 6, and although it is not yet confirmed, the XAI vote could be presented at this event, according to AP News.
Musk previously said that his priority was to reward loyal investors through his portfolio. In June 2024, he declared that he would favor shareholders of his “other companies, including Tesla”, in the event that one of his businesses are making public. “Loyalty deserves loyalty,” he wrote.
With SpaceX, already investing in XAI, and the startup winning the field in the generative race of AI against Openai and Google, the result of the Tesla shareholders’ vote could be a central moment – not only for the future of XAI, but also for the global vision of Musk to manage its companies on a shared technological and financial orbit.
If it is approved, Tesla’s investment in Xai would mark a historic vote of trust in the IA society of the Musk Empire. But that also raises fundamental questions about governance, transparency and consolidation of power in Musk’s sprawling companies. For the moment, the ball is in the Tesla shareholders’ court, all eyes seeking to see if they will choose to double the arms race of AI under the aegis of muskomy.
