Tesla shareholders to vote on investing in Musk’s AI startup xAI

Summary

Tesla shareholders will soon vote whether to let the electric vehicle maker invest in Elon Musk’s AI startup xAI, a proposal pitched as a way to strengthen Tesla’s ambitions in AI, robotics, and energy. Listed in Tesla’s proxy statement alongside a company-backed push to raise Musk’s 10-year pay package to $1 trillion, the proposal comes from Stephen Hawk, a Florida shareholder with a $2,000 stake of common stock. His supporting statement reads: Tesla’s integration of Grok into its vehicles demonstrates the tangible benefits of collaboration with xAI. As Tesla pivots toward AI-driven technologies, including Full Self-Driving and robotics, a strategic investment in xAI would secure access to advanced AI capabilities, enhance product innovation, and drive shareholder value. The board, which often suggests investors vote against shareholder proposals, is neutral on this one. If Tesla does end up investing in xAI, it would be the second of Musk’s companies to do so. SpaceX, Musk’s aerospace company, has committed to investing $2 billion in xAI as part of a $5 billion equity raise. Analysts have speculated that SpaceX’s involvement in xAI could signal the AI firm is having trouble raising from outside investors. (Musk also merged X, the company formerly known as Twitter, with xAI earlier this year.) Some Tesla shareholders have argued that xAI is a rival to Tesla, since Musk has often described his EV company as an AI company. Last year, shareholders sued Musk and the company for allowing Musk to startup a rival AI firm, but the case was dismissed. Hawk’s proposal comes as Tesla grapples with weakening EV sales and a lackluster robotaxi rollout. The company has attempted to direct investor attention away from those headwinds and towards Tesla’s AI efforts, which center on testing and deploying autonomous vehicles and Optimus, its humanoid robot. Musk has argued that he requires more of a controlling stake in Tesla to lead the company’s AI efforts, rather than get distrac...