Tesla shareholders have voted in favor of investing in xAI, Elon Musk's artificial intelligence startup. The advisory vote at the company's annual meeting saw more support than opposition, though many abstained. Tesla's board will now examine potential next steps.
At Tesla's shareholder meeting on Thursday, investors ratified a $1 trillion pay package for CEO Elon Musk and also supported an investment in xAI, the AI company founded by Musk in July 2023. xAI has rapidly grown, raising more than $12 billion to achieve a $50 billion valuation by 2024, and develops the Grok chatbot integrated into X, Musk's social media platform.
The vote was advisory, with more shareholders in favor than against, but a significant number abstained. Brandon Ehrhart, Tesla's General Counsel, announced the results, stating, "Since this is an advisory vote, the board will examine the next steps in light of this level of shareholder support."
Musk has expressed enthusiasm for the idea, previously posting on X that if it were his decision alone, Tesla "would have invested in xAI long ago." The exact amount of any potential investment would be determined by Tesla's board if it proceeds.
This potential move fits into the interconnected web of Musk's companies, often called "The Muskonomy," which includes Tesla, SpaceX, Neuralink, The Boring Company, and xAI. For instance, in March, xAI acquired X in an all-stock deal valuing xAI at $80 billion and X at $33 billion. Earlier this year, SpaceX announced a $2 billion investment in xAI.
Proponent Stephen Hawk, who submitted the proposal, argued during the meeting, "Tesla has always been an AI company revolutionizing transportation, energy, and robotics through FSD and Optimus. Let's not outsource our destiny, but rather own it and maintain power, control, and safety."
Such cross-investments have faced scrutiny in the past. In 2016, Tesla acquired SolarCity for $2.6 billion in stock, leading to a shareholder lawsuit over alleged conflicts of interest, as SolarCity was founded by Musk's cousin and was in debt. A judge ruled in Musk's favor, but the integration into Tesla Energy was rocky, with profitability not achieved until 2021.