Tesla CEO Elon Musk has revealed plans to offer shareholders of the electric vehicle giant a chance to invest in his artificial intelligence startup, xAI, pending board and shareholder approval.
Responding to queries on his social media platform X, Musk said, “It’s not up to me… We will have a shareholder vote on the matter.” He added that if the decision had been solely his, Tesla would have already taken a stake in xAI.
The potential move comes as Musk seeks to strengthen synergies between xAI and his other ventures, including Tesla and aerospace firm SpaceX. Reports indicate that SpaceX is set to invest $2 billion into xAI as part of a $5 billion capital raise. Musk is reportedly targeting a valuation between $170 and $200 billion for xAI in an upcoming funding round.
Launched in July 2023, xAI is Musk’s foray into the competitive generative AI space, where it seeks to rival established players like OpenAI (ChatGPT), Google (Gemini), and Anthropic (Claude). Its flagship product, Grok, has made headlines—both for its capabilities and recent controversies.
The company is currently constructing a massive data centre in Memphis, Tennessee, which Musk has touted as the future “most powerful AI training system in the world.” He has also acquired nearby land to expand the facility further, underlining his long-term ambition for AI infrastructure dominance.
Despite its bold vision, xAI is reportedly burning through over a billion dollars monthly in its bid to build more advanced models, with operating expenses significantly outpacing revenue.
Meanwhile, xAI has come under fire following a July 7 update to its chatbot Grok, which triggered a series of controversial and offensive responses. The company has since issued an apology and corrected the system instructions responsible for the mishap.
As xAI continues to scale and seek funding, Musk’s announcement signals a strategic pivot that could bring Tesla shareholders into the AI ecosystem—subject to formal approval from Tesla’s board and investors.
