Tesla shareholders will vote on whether or not to speculate into xAI, Tesla CEO Elon Musk’s personal firm, based on a put up by Musk on twitter right this moment.
Elon Musk isn’t just the CEO of Tesla, the electrical automotive firm that you could have heard about on occasion in Electrek’s protection, however a number of different corporations as effectively. And, famously, Musk corporations usually share sources – there was a lot discuss of incorporating SpaceX expertise into Tesla autos, and placing xAI/twitter’s “MechaHitler”…. er, I imply, “Grok”…. function into Tesla automobiles, amongst different collaborations which have occurred over his numerous corporations’ histories.
And right this moment, Musk made it official that he’ll search larger collaboration between three of his corporations: Tesla, xAI, and twitter, within the type of an funding into xAI by Tesla.
The state of affairs is a bit more difficult than that, although.
Tesla is a public firm, owned by shareholders. Musk is the most important shareholder, however solely owns round 12% of the corporate himself.
It is a completely different state of affairs than xAI, which is a personal firm, owned by Musk. Whereas there are different traders, he can train rather more direct management over the corporate, and doesn’t should put large selections as much as a vote.
One of many current selections he made with xAI was to buy twitter in March. It’s possible you’ll say, “wait, I believed he purchased twitter again in 2022?,” and also you’d be right. Musk bought twitter for $44 billion in 2022, which was broadly agreed to be far too excessive a worth, after which quickly noticed the corporate’s valuation drop to beneath $10 billion.
Then, in March 2025, Musk had xAI buy twitter in an all-stock deal, valuing twitter firm at $45 billion – once more, far too excessive of a valuation, however contemplating he bought the corporate from himself, he might set the worth at no matter he needed.
The transfer was broadly thought of to be a bailout of twitter, and the numbers concerned thought of arbitrary, maybe partially to assist save face for Musk after he made one of many worst enterprise offers of all time.
Now the 2 are the identical entity, and it appears clear that he want to deliver Tesla into the fold, indirectly or one other.
Musk has already improperly used sources from Tesla, a public firm, to spice up xAI and twitter, his personal corporations. Final yr, he gave up Tesla’s precedence place for extremely sought-after NVIDIA H100 GPUs, as a substitute delivery these GPUs to xAI and twitter. Tesla might have used these GPUs for coaching its FSD/Robotaxi programs, which Musk has claimed is a very powerful factor to Tesla’s future, however as a substitute graciously despatched them to his different firm that used them to, uh, practice a bot to say Nazi stuff apparently.
xAI has additionally poached expertise from Tesla, a number of instances, displaying how Musk is utilizing Tesla as a farm staff for his personal firm.
So it hasn’t been a secret that Musk want to use public cash to bail out his personal corporations, as he’s been setting the stage for for some time now.
Musk has beforehand “mentioned” getting Tesla to spend money on xAI up to now, however the concept was by no means made official till right this moment, when Musk stated that he’ll put the thought to a shareholder vote.
In response to one among his superfans asking for the the chance to waste cash on an overvalued social media app (which might mark the third time it has been overpaid for in as a few years), and the backend fueling “MechaHitler,” Musk stated this:
Tesla historically holds its annual shareholder assembly across the center of the yr, so if it have been a standard yr, this shareholder vote may be imminent.
However it’s not a standard yr, as simply final week Tesla introduced an exceptionally late shareholder assembly, pushing it again to November, the most recent it has ever held the assembly.
Which means Musk may have round 4 months to marketing campaign for this concept – one thing that he’ll maybe have extra time to do, now that he’s now not cosplaying as a authorities official.
We don’t know what the construction of the deal may seem like but, however Musk has been clear up to now that he desires extra shares in Tesla. After promoting a lot of his shares in an effort to purchase twitter, he later complained that he doesn’t really feel comfy having lower than 25% of Tesla. Provided that his current xAI/twitter deal was an all-stock deal, Musk might try and fund any funding of Tesla into xAI through shares, giving himself extra Tesla shares in alternate for the corporate gaining a portion of xAI. Although to get him to 25% voting shares in Tesla, that will require both an infinite valuation for xAI, a small valuation for Tesla, or buying a big share of xAI (or, maybe, all three, given how a lot larger TSLA’s valuation is than xAI’s).
We could nevertheless have a touch as to how that vote will go, as a result of the final time Musk campaigned for a clearly horrible concept, Tesla shareholders ate it up.
In mid-2024, Musk ended his yearslong absenteeism at Tesla in a flurry of exercise, hoping to steer sufficient shareholders to vote for his unlawful $55B pay bundle.
That flurry concerned firing 10% of the corporate (supposedly in an effort to lower your expenses – although Tesla’s earnings have dropped drastically since), together with vital management and profitable groups, which prompted chaos with Tesla’s tasks. He additionally pushed again an all-important reasonably priced automotive venture (which we’ve nonetheless heard nothing about) and held Tesla’s AI tasks hostage whereas shifting each sources and employees from Tesla to his personal AI firm, at the same time as he claims that AI is the way forward for Tesla.
In the long run, these unhealthy selections labored, and shareholders voted to present their unhealthy CEO his $55B pay bundle, although it was later dominated to nonetheless be unlawful.
So it seems like we’ve obtained one other marketing campaign arising, and if final time was any indication, count on some actually unhealthy selections alongside the way in which. It labored final time, didn’t it?
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