Elon Musk sparked interest by posting an informal poll on the social media platform X, asking if Tesla should allocate $5 billion to his new startup, xAI.
Musk, who helms multiple ventures including Tesla, SpaceX, The Boring Company, Neuralink, and X Corp., shared the poll following Tesla’s second-quarter earnings call, according to CNBC.
“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),” Musk posted Tuesday.
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
The automaker reported earnings below analysts’ forecasts for the fourth consecutive quarter and a drop in revenue in its automotive division, despite a surge in energy storage sales. Tesla’s future vision centers around its development of robotaxis and humanoid robots.
Following the earnings update, Tesla’s shares dipped over 7% in after-hours trading.
Musk’s enterprises often collaborate financially, though typically not at billion-dollar levels. For instance, SpaceX has advertised its Starlink services on X, and The Boring Company is constructing tunnels at Tesla’s Texas facility.
During the earnings call, shareholders questioned Musk about the potential integration of xAI’s software, Grok, into Tesla vehicles.
In response, Musk, the world’s richest person, said, “Tesla is learning quite a bit from xAI. It’s been actually helpful in advancing Full Self-Driving and in building up the new Tesla data center. With regards to investing in xAI, I think we’d need to have a shareholder approval of such investment. But I’m certainly supportive of that if shareholders are.”
The $5-billion figure emerged only after Musk posted the poll. Details on how Grok enhances Tesla’s technology were not disclosed.
Founded in March 2023 and publicly unveiled by Musk in July, xAI focuses on developing large language models and AI software to rival products from tech giants like Google, Microsoft, OpenAI, and Meta.
AI chatbots from these companies can generate story ideas, transcripts, meeting action items, code, or translations.
XAI’s initial product, Grok, is positioned as a politically incorrect and witty alternative to leading chatbots such as OpenAI’s ChatGPT, Google’s Bard, Microsoft’s Bing, and Anthropic’s Claude.
Despite its promise, Grok has yet to match the utility of these established offerings.
Previously, xAI secured $6 billion in a Series B funding round, achieving a post-money valuation of $24 billion as per a company blog post dated May 27. Backers include Andreessen Horowitz and Sequoia Capital.
