Musk Polls Public on $5 Billion Tesla Investment in xAI
Early results show a majority in favor of the investment.
Elon Musk, CEO of Tesla, has launched a poll on social media platform X, asking users whether Tesla should invest $5 billion in his artificial intelligence (AI) startup, xAI. Early results show a majority in favor of the investment, with about 70% of the 386,000 participants supporting the move within the first three hours.[1]
Musk clarified that the poll is a preliminary step, stating, "Board approval & shareholder vote are needed, so this is just to test the waters." This poll follows Tesla's recent earnings report, which revealed its lowest profit margin in five years due to price cuts and increased spending on AI projects.
During Tesla's earnings conference call, Musk highlighted the potential benefits of xAI for Tesla, mentioning that the startup could aid in advancing full self-driving capabilities and in the development of Tesla's new data center. He also suggested possible integrations of xAI's chatbot, Grok, with Tesla's software.
Should Tesla invest $5B into @xAI, assuming the valuation is set by several credible outside investors?
— Elon Musk (@elonmusk) July 24, 2024
(Board approval & shareholder vote are needed, so this is just to test the waters)
xAI, founded by Musk last year, raised $6 billion in Series B funding in May, reaching a post-money valuation of $24 billion. Investors in the startup include Andreessen Horowitz and Sequoia Capital. Musk has indicated plans for a quarter of xAI to be owned by investors in X, the social media firm formerly known as Twitter, which Musk acquired for $44 billion.
Despite concerns about resource allocation, Musk assured during the earnings call that his commitments to other ventures would not detract from Tesla's operations.
Musk frequently uses polls on X to gauge public opinion. In 2021, he conducted a poll about selling 10% of his Tesla stake, subsequently following through with the sale just days later.
Recently, Tesla shareholders approved a record-breaking pay package for CEO Elon Musk, valued at more than $47 billion. This package, composed of 303 million stock options, was initially dismissed by a Delaware judge earlier this year due to flaws in the approval process.
