Tesla and SpaceX CEO Elon Musk has asked followers whether his carmaker company should invest $5 billion in the artificial intelligence startup xAI. Musk launched the poll on social media platform X (previously Twitter), which he acquired two years ago.
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Early voters have polled in favor of the spending, but the tech mogul said, “Board approval and shareholders vote are needed, so this is just to test the waters.” It is important to remember that the poll for the investment idea came after Tesla reported its lowest profits in five years. The profit margins decreased after reductions in prices and higher spending on AI projects.
Elon Musk says Grok would help enhance Tesla’s Full Self-Driving system
During Tesla’s quarterly earnings call on Tuesday evening, Musk said, Tesla is learning a great deal from xAI. Shareholders asked Musk if there is a possibility of Tesla investing in xAI and integrating its software, called Grok, into Tesla cars. He said, xAI would be “actually helpful in advancing Full Self-Driving and in building up the new Tesla data center.”
Speaking of investment, Musk said he thinks shareholders’ approval is required for any such investment. He added that he is in favor of it if shareholders approve it, too. However, Musk did not elaborate on how Tesla was advancing its driving system with Grok.
At press time, 475,234 people had participated in the poll, with nearly 70% voting in favor of the spending while a little more than 30% objected to the idea.
Musk says he will not divert resources from Tesla to his other companies
Musk launched xAI in March 2023, hoping to compete with OpenAI’s flagship product, ChatGPT. The firm raised $6 billion in a series B funding round in May last year, and Musk publicly discussed the company for the first time in July. The startup now has a valuation of $24 billion, with backers including Sequoia Capital and Andreessen Horowitz.
xAI develops artificial intelligence-based software products and large language models. Its flagship product is a chatbot called Grok. According to CNBC, Grok is a “far cry from providing the utility of leading chatbots like OpenAI’s ChatGPT, Google’s Bard, Microsoft’s Bing, and Anthropic’s Claude today.”
Also read: Tesla to start using humanoid bots in 2025, says Elon Musk
In November 2023, Musk said that X Corp investors would own a quarter of xAI shares. Musk bought the social media platform for $44 billion, but the company’s value has depreciated since its acquisition.
Musk also made it clear that he is not thinking of divesting resources from his company, Tesla, to his other firms. While the shareholders’ concerns were real, as back in June, a report from CNBC said the world’s richest man had asked Nvidia to ship thousands of AI chips to his social media company X and his most recent startup, xAI. These chips were previously ordered for Tesla, but Musk said Tesla’s data center was at capacity, and there was no space to install them.
This is not the first time that Musk has sought public opinion. A Reuters report said he asked Twitter users in 2021 if he should sell 10% of his stakes in Tesla and did just so shortly after the poll.
