In a move to blend electric vehicles with artificial intelligence, Tesla’s shareholders have approved a potential investment in xAI, an AI company founded by Tesla’s CEO Elon Musk. The shareholders voted to support this investment without being told the exact amount or specific terms. This vote was required because Musk leads both companies, making it a related-party transaction that must follow corporate rules.
xAI launched in July 2023 as an independent AI venture separate from Tesla. Despite Musk’s leadership at both organizations, xAI operates with its own corporate structure and funding sources. The company’s recent funding rounds valued it at $50 billion. xAI focuses on developing artificial intelligence systems designed to seek truth and eventually create advanced general intelligence.
Tesla already possesses significant AI capabilities. The company’s Full Self-Driving system operates in its vehicles today. Tesla also built Dojo, a powerful supercomputer that trains neural networks for vision processing. The company processes 1.5 million video clips daily to improve autonomous driving.
Moreover, Tesla maintains over 10,000 robotic training units for its Optimus humanoid project and has developed proprietary AI chips for vehicle computing.
The potential investment could create several integration opportunities. xAI’s language models might upgrade Tesla’s FSD software. Tesla’s robotaxi vehicles could interact with advanced AI systems for better route-finding decisions. xAI’s safety structure could help validate autonomous vehicle protocols. The companies might share neural network training resources and vehicle data streams.
The investment still requires final approval from Tesla’s board and regulatory review. It must comply with Delaware corporate law and SEC disclosure requirements for major transactions. The investment will also face antitrust scrutiny given Musk’s leadership positions at both companies. NASDAQ listing standards and independent board committee review must be satisfied before completion.
Tesla has $26.2 billion in cash reserves that could fund this investment. The move reflects broader industry trends. Google invested $2 billion in Anthropic, while Microsoft holds a $13 billion stake in OpenAI. Amazon committed $4 billion to Anthropic.
Traditional automakers spent $18.7 billion on AI development in 2024, and 78% of autonomous driving startups secured AI partnership funding this year. Enhanced AI capabilities could also improve Tesla’s software updates, which currently take about 30 minutes on average but may require more time for complex system changes.