Elon Musk has dismissed the possibility of a merger between Tesla and his artificial intelligence startup xAI, but confirmed he will seek shareholder approval for Tesla to invest in the AI firm. The move highlights Musk’s strategy of fostering collaboration across his companies while keeping them legally separate.
Funding Push as xAI Aims to Rival OpenAI
The decision comes as xAI is reportedly raising $5 billion, with SpaceX expected to contribute $2 billion, according to The Wall Street Journal. The funding would help xAI compete with industry leaders like OpenAI in the costly AI arms race. Musk has previously emphasized synergies between his firms—Tesla engineers assisted in his 2022 Twitter takeover (now X), and xAI’s Grok chatbot is being integrated into Tesla vehicles.
Shareholder Vote to Decide Tesla’s Role in xAI
On X, Musk stated he would let Tesla investors vote on whether the automaker should invest in xAI, saying, “If it was up to me, Tesla would have invested in xAI long ago.” He believes closer ties could accelerate Tesla’s self-driving technology, but some investors may question the financial risks. Tesla’s annual shareholder meeting is set for November 6, following pressure from investors to address governance concerns.
Data and Distribution: The X Factor
Earlier this year, xAI acquired X in a $33 billion deal, giving it access to a vast stream of real-time user data—a key advantage in AI training. While xAI recently launched Grok-4, which Musk claims is “the smartest AI in the world,” it still trails ChatGPT in adoption. Investments from Tesla and SpaceX could help close the gap, but Musk’s empire remains a complex web of intertwined ambitions.
With regulatory scrutiny rising over Big Tech’s AI dominance, Musk’s approach—leveraging synergies while maintaining corporate separation—could redefine competition in the AI landscape.