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Reading: Elon Musk asks, Should Tesla Invest in xAI?
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Elon Musk asks, Should Tesla Invest in xAI?

Highlights

  • Elon Musk, CEO of Tesla, has initiated a poll on social media platform X, asking users if Tesla should invest $5 billion in his artificial intelligence startup, xAI. Early votes indicate strong support, with 68,5% in favor of the investment. However, Musk emphasized that board approval and a shareholder vote are necessary, and this poll […]
Samantha Reed
Last updated: 1 March, 2025 - 9:00 pm 9:00 pm
Samantha Reed 3 months ago
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Elon Musk, CEO of Tesla, has initiated a poll on social media platform X, asking users if Tesla should invest $5 billion in his artificial intelligence startup, xAI. Early votes indicate strong support, with 68,5% in favor of the investment. However, Musk emphasized that board approval and a shareholder vote are necessary, and this poll is merely to gauge public opinion. This initiative follows Tesla’s recent financial report, which showed its lowest profit margin in five years due to price cuts and increased AI spending.

Contents
How Will xAI Benefit Tesla?What is xAI and Its Impact on the Market?Is Musk Diverting Resources from Tesla?

How Will xAI Benefit Tesla?

Musk claims that xAI will significantly advance Tesla’s goals, particularly in full self-driving technology and enhancing the new Tesla data center. He also mentioned potential integration of xAI’s chatbot, Grok, with Tesla’s software. This alignment could bolster Tesla’s capabilities in AI and data management, potentially leading to more innovative products and services. Nearly three hours after the poll was posted, about 742.930 people had participated, reflecting strong public interest in this potential investment.

Should Tesla invest $5B into @xAI, assuming the valuation is set by several credible outside investors?

(Board approval & shareholder vote are needed, so this is just to test the waters)

— Elon Musk (@elonmusk) July 24, 2024

What is xAI and Its Impact on the Market?

Musk launched xAI last year with the ambition of creating an alternative to ChatGPT. The startup secured $6 billion in Series B funding in May, reaching a post-money valuation of $24 billion. Notable investors include Andreessen Horowitz and Sequoia Capital. Musk envisions a quarter of xAI to be owned by investors in X, formerly known as Twitter. This strategic alignment might increase investor confidence in both xAI and Tesla, given Musk’s proven track record in tech innovation.

Is Musk Diverting Resources from Tesla?

There are concerns that Musk might be reallocating resources from Tesla to his other ventures, including xAI and X. In June, it was reported that Musk redirected thousands of AI chips from Nvidia, originally intended for Tesla, to xAI and X. Musk justified this by stating that Tesla’s data center was at full capacity. Despite these concerns, Musk reassured investors during Tesla’s earnings call that these actions would not detract from Tesla’s operations or growth.

The poll regarding Tesla’s potential $5 billion investment in xAI has garnered substantial public support. Musk believes that integrating xAI’s technologies will propel Tesla’s advancements in AI and data infrastructure. While some are wary of Musk’s resource allocation across his various enterprises, the overall sentiment from the poll indicates optimism about the potential benefits of this investment. Whether Tesla proceeds with this investment will ultimately depend on board and shareholder decisions, but the initial response suggests a promising outlook for this strategic move.

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Samantha Reed
By Samantha Reed
Samantha Reed is a 40-year-old, New York-based technology and popular science editor with a degree in journalism. After beginning her career at various media outlets, her passion and area of expertise led her to a significant position at Newslinker. Specializing in tracking the latest developments in the world of technology and science, Samantha excels at presenting complex subjects in a clear and understandable manner to her readers. Through her work at Newslinker, she enlightens a knowledge-thirsty audience, highlighting the role of technology and science in our lives.
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